Ex-India hot dip galvanized (HDG) coil prices have been kept stable during the past week, but trade has fallen silent with sellers unwilling to bridge the widening bid-offer gaps after Middle Eastern buyers began seeking higher discounts, SteelOrbis learned from trade and industry circles on Thursday, January 30.
Sources said that, even as ex-India HDG (Z120 grade) was kept unchanged at $710-740/mt FOB and deals concluded lower at the level of $690/mt FOB in earlier weeks, sellers have been withdrawing offers after bids received were even lower at $660-680/mt FOB.
According to the sources, while demand in the Gulf Co-operation Council (GCC) region was still weak, distributors have been looking at deals only if additional price benefits on the part of the sellers from the depreciation of the rupee over the past one month are added to existing discounted offers. However, mills are heard to be declining such bids and refusing higher discounts, claiming the higher realizations from the depreciation of the Indian rupee against the US dollar are being offset by the rise in the landed cost of imported raw materials and that the mills are not in a position to pass on currency benefits in their sales price.
“We do not think that buyers are serious when asking sellers to pass on benefits of the weak currency in the invoice price. It is just that there is a lot of bargain hunting amid relatively weak demand,” an official at a private mill told SteelOrbis, adding, “From the sellers’ point of view, further aggressive pricing is not viable on year-end considerations of maximizing the top-line and in any case large mills have low export allocations in this last quarter.”
In the meantime, offers for ex-India cold rolled coil (CRC) have been reported at around $600/mt FOB, up by $5/mt on the lower end of the range week on week. According to sources, offers for ex-India CRC in Europe have been voiced at $650/mt CFR, compared to $645-650/mt CFR last week, standing in line offers from Vietnam and Taiwan, though interest in imports has been minimal.