The ex-India hot dip galvanized (HDG) trade has fallen silent over the past week, with offers remaining unchanged and bids still at low levels, while buyers have been deferring deals, also given the flaring up of the crisis in the Middle East, SteelOrbis learned from trade and industry circles on Thursday, July 9.
Sources said that, while ex-India HDG (grade Z120) prices are stable in the range of $780-790/mt FOB, bids have remained at lows of $740-750/mt FOB, with buyers expecting declines and sellers unwilling to accept discounted sales amid rising costs of production.
According to the sources, fresh uncertainties affecting trade flows have surfaced following fresh tensions in the Gulf region triggering volatility in shipping rates and challenges in determining CIF (cost, insurance, freight)-inclusive sales contracts.
At the same time, in Europe both buyers and sellers have been re-assessing country-specific tariff quotas before committing fresh trades, the sources said.
“Cost pressures are impeding sellers from being aggressive in pushing sales, particularly against stiff competition from ex-China offers. In our assessment, large local mills have been very conservative on export allocations during the current quarter (July-September) anticipating that the geopolitical situation and tariff barriers to trade will offer strong headwind to exports,” an official at a private mill said.
“Domestic demand is good. Higher grades of HDG, a major component in exportable automobiles from the country, are seeing good demand. Mills are therefore focusing on serving this customer category… eroding export sales,” he added.
