Indian hot dip galvanized (HDG) coil export prices have remained stable at $750/mt FOB during the past week, while the inactivity in terms of exports has been compounded by the strong Indian currency coupled with lower offers from China, traders said on Thursday, May 11.
"Chinese HDG export offers have fallen sharply during the week by at least $20/mt on FOB basis as domestic prices in China weakened. Indian HDG exporters are in no position to attract any buying in the face of such competition given the strength of the rupee against the dollar," a Mumbai-based trader said.
"The medium-term outlook for Indian HDG exports is very bleak. There is little that the market can do with the rupee consolidating its strength and with the government in no mood to intervene in the currency market," the trader added.
At least two traders said that US buyers are receiving offers but are not concluding any significant transactions as Indian exporters are not responding to US buyers' demand for volume discounts.
Market sources said that, although the Indian currency last Tuesday hit a three-week low at INR 64.63 to the dollar, the medium-term outlook for the currency remains strong with several currency dealers forecasting it will breach the INR 63 to the dollar mark in response to the strong dollar inflow.
The sources said that, with buyers not responding to current offers and with exporters having no window to adjust offers as the strength of the rupee is wiping out margins, the outlook for Indian HDG exports remains bearish and most of the large mills are refocusing on domestic sales.