Ex-India hot dip galvanized (HDG) coil prices have remained stable despite stalled buying attributed to skepticism over current high prices, buyers reassessing demand, and EU distributors heard to have completed their short-term restocking program, SteelOrbis has learned from trade and industry circles.
Sources said that no deals have been reported over the past week by any of the large local integrated mills, but offers and the tradable levels for mills have been kept unchanged at the higher levels of $950-1,010/mt FOB, with the midpoint at $980/mt FOB, while last week most deals to Europe were at around $990/mt FOB. Prices have remained high from producers on expectations that buying will revive shortly as the fundamentals of demand remain unchanged in major markets in the EU, even though Middle Eastern buyers are reported to be taking pause ahead of Ramadan.
A section of market circles, however, did concede that prices may have moved up too fast and at least some buyers have shifted to sourcing cheaper alternatives with ex-China prices softening marginally, while Indian sellers have been holding the price line.
“The lull in trading is normal when the market is on an uptrend. Buyers turn cautious, while sellers wait to take a call on the next round of price increases. Local exporting mills remain optimistic of a strong resumption of exports next month, the start of a new fiscal year,” a source from a large mill said.
“This is also a good time for mills to build up an exportable surplus. Higher export allocations for the first quarter of the next fiscal year will enable sellers to leverage higher prices and look at diversifying new market potentials, particularly in Africa,” the source said.