Market conditions have recently been putting pressure on India's coated steel exporters. It is becoming increasingly difficult for them to compete in the international markets due to several factors.
Europe was for some time one of the best markets for Indian galvanized and coated steel producers. However purchase activities in this market have slowed down lately. The Indian Rupee has gained value against the US Dollar and on top of that producers' raw material costs have increased significantly in the month of May. Zinc prices have moved up from $3,500/mt levels to $4,100/mt levels over the last couple of weeks. This obviously creates difficulty as rising costs put pressure on the producers until they are able to pass this increase onto their customers. In such a transition period, it becomes hard for the Indian producers to remain competitive in the international market against the offers made by the Chinese.
Latest reports from the market indicate not very high volumes of bookings although the conclusion of some sales has been reported. Some tonnage to Italy is reported at around €630/mt FOB (approx. $850/mt) for HDG at 0.50-0.75 mm thickness with Z100 coating. But recently re-rollers in particular have preferred to focus on the domestic market rather than on exports as they get better results in this direction.
It is believed that as their order books are not full, the Indian producers, although they don't have much flexibility on pricing, may be open to negotiations against firm bids they will receive in this period.