Indian hot dip galvanized coil (HDG) export offers have been hiked aggressively by integrated steel mills over the past week to above the $700/mt FOB mark, a historical high, amid continued lack of availability of hot rolled coil (HRC) for re-rolling in India and a strong revival in buying interest in the EU region, SteelOrbis has learned on Thursday, December 3.
According to market sources, ex-India HDG offers have been heard at as high as $710-720/mt FOB, but achievable prices for deals were slightly lower at around $685-700/mt FOB, compared to deals concluded in the range of $660-670/mt FOB in the earlier week.
The sources said that the number of enquiries and bids received from the EU market saw a significant rise over the past week, amidst reports of a shortage of HDG in the market, but Indian exporters have been unable to meet several higher-volume bids as most integrated mills do not have sufficient inventories of HRC for conversion and to conclude export contracts for January-February HDG deliveries, resulting in mostly medium-tonnage deals being concluded by exporters.
In fact, at least two integrated steel mills are reported to have settled for supply contracts with deliveries as late as April to EU buyers, as reports received in the industry indicate a lack of available volumes even for future deliveries.
A western India-based exclusively flat steel producer has reported a deal for March delivery for 15,000 mt at a price of around $690/mt FOB with an Antwerp-based trading firm.
The same steel mill also concluded a trade with Gulf-based buyers for a smaller tonnage of 10,000 mt at $685-690/mt FOB for April delivery, the sources said.
A Maharashtra-based integrated steel mill has reportedly concluded a trade for 25,000 mt with EU-based buyers at a price of around $700/mt FOB for April delivery, the sources added.
“The price assessment in the market is very bullish in view of rising input costs and demand across major markets. The issue is now not one of demand but of supplies by sellers. There is a major shortage for early deliveries,” an official from a private sector integrated steel mill said.
“Sellers are looking at deals for beyond April deliveries. Most local integrated steel mills expect strong domestic demand for HRC to be sustained through the current fiscal year. Any increase in re-rolling production and increasing HDG export allocation can only be possible in the first quarter of the next fiscal year, once local pent-up demand for HRC eases,” he added.