Indian export offers for hot dip galvanized (HDG) have remained stable during the past week at $700-710/mt FOB, but have failed to attract significant buying interest from the US despite minor discount offers in the range of $10-20/mt as nervousness has mounted ahead of the US presidential inauguration, traders said on Thursday, January 19.
“The discount offers are not seen across the board but are very selective with the aim of boosting transaction volumes. However, they have failed to attract US buyers, with most buyers indicating that they prefer to wait and watch the trade stance of the new administration,” a Mumbai-based trader said.
“Indian exporters are losing margins with their current HDG export offers in view of rising input costs. In fact, export offers for HDG and domestic prices of CRC are almost the same and most exporters are making export offers only to maintain a market presence overseas,” the trader said.
“To ensure viable margins from overseas shipments of HDG, exporters need to increase offers by at least $20-30/mt, but current market conditions and overseas buyers’ reluctance to book significant volumes is preventing exporters from revising their pricing strategy,” the trader added.
Market sources said that US flat steel market prices have been rising on the back of US steel mills’ further upward adjustments of their base prices. This is largely in anticipation of the strong support expected from the new Trump administration for domestic steel mills and also in expectation of a substantial government investment push in infrastructure.
At the same time, however, trade barriers and trade wars are also increasing and hence the nervousness among the US steel distributors involved in imports, the sources added.