Ex-India hot dipped galvanized (HDG) prices were largely kept stable, but optimism regarding ongoing sales negotiations faded as bids fell far below sellers’ expectations, SteelOrbis learned from trade and industry circles on Friday, May 29.
Sources said that ex-India HDG (grade Z120) prices were stable at $770-780/mt FOB. According to trade circles, since last week an estimated 25,000-35,000 mt aggregate volume has been under sales negotiations for delivery to Gulf Cooperation Council (GCC) markets. It is learnt that sellers were willing to adjust prices to levels of $750-760/mt, but counterbids from buyers were even lower, in the range of $720-740/mt FOB, which proved to be unworkable.
It could not be confirmed whether the volumes on offer and sales pitches had been withdrawn by the two large sellers.
Deals largely failed to succeed due to a lack of consensus on delivery and shipping logistics. Sellers were seeking deep discounts to partially compensate for higher freight costs via alternative routes to Middle East conflict zones. But sellers, already facing rising energy costs, were not in a position to adjust offer levels to such an extent, a section of the trade said.
“Optimism quickly gave way to pessimism from the sellers’ point of view. There are too many challenges to completing sales in the Middle East in the current geopolitical situation. There is moderate demand in the GCC region while buyers in Europe have moved to the sidelines as tariff quotas are exhausted,” an affiliate of Tata Steel Limited said.
“We are not sure if buyers and sellers will return to the table again immediately. Sellers do not have much headroom to adjust prices as mills are facing strong inflationary pressures,” he added.
