Indian HDG exporters cut offers for third straight week with limited success in pushing volumes

Thursday, 15 August 2019 15:28:14 (GMT+3)   |   Kolkata
       

Indian hot dip galvanized (HDG) coil exporters have cut offers for the third consecutive week by $15/mt to $570/mt FOB with very limited success in pushing volumes overseas, traders said on Thursday, August 15.

“Indian exporters going in for repeated cuts in offers riding on the weakening of the local currency are well in line with the plunge in ex-China offers in the wake of depreciation of China’s currency,” a Mumbai-based trader said.

“However, both large steel mills and trader-exporters have only been able to marginally improve contract volumes for two primary reasons. Firstly, the religious holiday and the lack of business activity in a key market like the Gulf Co-operation Council (GCC) region has been a cause of the lack of response to offers. Secondly, buyers have still been waiting for a further fall in offer levels for the full impact of the depreciated RMB to be factored into ex-China offers and for the rising US-China trade tensions to impact prices,” the trader added.

However, Indian HDG exporters have reached the limits of aggressively pricing their offers considering that Indian steel mills unlike global steel mills have not benefitted from lower prices of inputs like coking coal and iron ore, while the lower price elasticity of raw materials in India will hamstring local steel mills in terms of making further cuts in offer prices.


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