Indian exporters of hot dip galvanized (HDG) coils have maintained their offer prices unchanged during the past week at $730/mt FOB even as buyers particularly from the US retreated against the backdrop of the fall in US flat product prices and rising inventories held by steel distributors in the US, traders said on Thursday, October 5.
“Buying activity was negligible. US steel distributors are burdened by inventories. US HDG prices are reported to be moving on a soft trend and there is no interest in imports at the moment,” a Mumbai-based trader said.
“In India, HDG exporters, particularly big steel mills, do not have pricing leverage at present to push volumes, having reduced their export offers late last month, and cannot risk another adjustment so soon,” the trader added.
“Indian exporters can only find a window to further reduce offers if the Indian rupee currently trading at around INR 65.50 to the dollar breaches the INR 66 to the dollar mark,” he added.
However, two other traders attributed the waning exports to the current worry over the Goods and Service Tax among exporters. The traders said that exporters having to pay tax on export shipments and claim refunds later was impacting the export trade in general.
Some market sources said that large Indian steel mills were reducing their export push in view of taxation issues and instead focusing on the domestic market which was seeing moderately strong HDG demand. In support of this, the sources pointed out that the Gulf Co-operation Council market was completely off the radar of Indian exporters with virtually no significant transactions to that market reported for the past several weeks.