Ex-India hot dip galvanized (HDG) coil prices have remained stable at higher levels over the past week, but trade activity has continued to be stalled by low exportable volumes available from local producers, the low import appetite in key destinations, and sustained logistical and transportation challenges due to the prolonged tensions in the Middle East.
More specifically, offers for ex-India HDG grade Z120 offers have been maintained at higher levels of $750-785/mt FOB, with mills citing rising energy costs and lower rates of conversion.
According to market insiders, a few bids were received from Italy at $700-720/mt FOB, but these were not found to be viable, with sellers citing very little leeway to discount sales significantly, when production costs have been rising and mills have been forced to lower captive conversion.
Following cutbacks in galvanizing processes, most mills have been focusing on local sales with almost negligible export allocations for the current quarter, the sources said.
“Import interest in Europe is minimal in view of limitations from the carbon border adjustment mechanism (CBAM). Also, distributors, we hear, are almost fully stocked. Volatile freight rates are a major challenge for deliveries to the west,” an associate of Tata Steel Limited told SteelOrbis.
“There are significant cost-push pressures on production. It is not the time to enter any aggressive pricing to push sales overseas,” he added.
