Indian exporters hot dip galvanized (HDG) coil offers have tumbled during the past week, decreasing by $20/mt to $505/mt FOB in reaction to the sharp fall in Chinese flat steel export offers, but no significant deals were reported by any of the large local steel mills as buyers expect a further fall in prices, traders said on Thursday, October 17.
“Large Indian steel mills’ attempt to push up HDG offers earlier in the month has backfired. Indian HDG exporters were forced to cut prices drastically during the past week in response to slump in Chinese flat steel export quotations,” a Mumbai-based trader said.
“Despite the sharp reduction in offers, no deals were reported in the market owing to buyers in key markets - like the Gulf Co-operation Council (GCC) – expecting a further fall in import flat steel quotations amid the foreseen higher volume offerings from China as domestic demand during winter months is expected to weaken and more volume will find their way to overseas,” a source said.
Meanwhile, most local steel mills have been lowering capacity utilization rates of their various plants over the past three to four months, reacting to overall sustained demand depression. Steel mills were adjusting their product portfolio and lowering production of coated steel products in general.
Since no deal has been concluded during the past week, the fall in offers has largely remained notional. And it is noteworthy that with lower HDG volumes available, none of the large exporting steel mills are keen on aggressively concluding export deals at current low prices.