Ex-India hot dip galvanized (HDG) coil prices have been maintained relatively stable this week but trade activity has remained stalled in the absence of business opportunities in the war hit-Middle East and the absence of any guidance on freight and insurance cost elements that go into determining CIF (cost, insurance, freight)-based sales contracts for business in Europe, SteelOrbis learned from trade and industry circles on Friday, March 13.
Sources said that ex-India HDG (grade Z120) have been notionally kept stable in the range of $710-745/mt FOB, but most large mills are heard to have paused submitting any offers. According to the sources, while business activity in the Middle East has been at a near standstill for over a week, even limited sales in Europe have dried up amid uncertain delivery timelines and challenges in drawing up firm buyer-seller contracts.
“After contract cancellations in the earlier week, neither buyers nor sellers are willing to risk any losses on sales that involve shipments through shipping routes through the Middle East. Any export sales are often based on sellers availing of pre-shipment credit from banks. Any cancellation of contracts or delays in payment receipts risks bank penal charges. Trade conditions are not normal now,” an affiliate of Tata Steel Limited told SteelOrbis.
“HDG as a category is also not amenable for any possible trade diversion to newer markets like East Asia where most local sellers have a very limited presence. The positive is that large local mills have very little export allocations in the last month of the current fiscal and will wait and watch,” he added.
