Ex-India hot dip galvanized (HDG) coil trade activity has improved but prices have posted only gradual gains. Buyers from Africa and the Gulf have been concluding deals but they have been cautious in accepting the significant price increases, prompting at least two mills to roll back offers, SteelOrbis learned from trade and industry circles on Thursday, January 12.
Ex-India tradable Z220-240 HDG prices have ranged at $860-880/mt FOB, almost stable week on week, but the new targeted levels have been higher at up to $900/mt FOB minimum for these grades. According to the sources, at least two integrated mills attempted to push up offers to around $1,000/mt FOB, which has been too high for the current market conditions.
Citing an example, a Gujarat-based mill submitted an offer for a small volume for end-of-February shipment to South Africa, but the deal could only be concluded after fresh appraisal of a new offer by the buyer at $860-870/mt FOB.
A deal for 12,000 mt for Gulf delivery was reported in the market at $865/mt FOB, while the same seller also confirmed a booking for 10,000 mt, with an Asian trading firm at the slightly lower price of $855/mt FOB.
An eastern Indian mill has concluded a trade for 5,000 mt for delivery to Nigeria at $865-870/mt FOB, the sources said.
In these conditions, the reference price for Z120 Indian coils has increased by $10-20/mt over the past week to $770-800/mt FOB, where the lower end represents the tradable level, while the higher end represents the new targeted prices by mills.
“Enquiries received are on the rise, apart from the EU region. But buyers are very cautious and price-sensitive considering overall demand uncertainties. Sellers are able to push volumes overseas but it is still a buyer’s market,” a source at ArcelorMittal Nippon Steel Limited said.
“There is some demand recovery in the US, which augurs well. But it is not a holistic rise and hence prices are still facing a lot of headwinds. We are still to see buyers from the EU return. Hence, sellers will have to be reconciled to concluding trades in sideways-moving market conditions,” he said.