Ex-India hot dip galvanized (HDG) coil prices have remained stable at higher levels over the past week, but deals have been stalled by the low exportable volumes held by large local mills and the wide bid-offer gap.
Sources said that ex-India HDG (grade Z120) offers have been quoted in the range of $750-785/mt FOB. However, while moderate demand has been seen, with a slight increase in the number of bids from Gulf Cooperation Council (GCC) markets, buyers have remained very price-sensitive, bidding at $690-710/mt FOB, even lower than $700-720/mt FOB reported a week ago.
According to the sources, the low capacity utilization levels of galvanizing furnaces owing to fuel shortages and the resulting lower available export volumes, together with the rising costs of production, have not mills with much leeway to push sales at discounts, despite the moderate demand coming from a few destinations.
At least two sources in trading circles have reported that a large Indian flat steel mill has concluded a sale of 20,000 mt to its European affiliate. Details of the price have not been disclosed, as the contract is reportedly based on internal transfer pricing and not directly linked to current market benchmarks.
“As a product category, HDG exports remain a peripheral export activity for most mills, particularly when demand is moderate and buyers are price-sensitive. Generally, local mills are active in exports when prices are on a bullish curve and withdraw when the market declines,” an affiliate of Tata Steel Limited told SteelOrbis.
“The prolonged war in the Middle East and emissions rules in Europe have only further added to the challenges in exports,” he added.
