Indian hot dip galvanized (HDG) exporters have decreased prices slightly in reaction to the sharp fall in ex-China prices, but barring only one stray deal they have refrained from concluding more deals given the very narrow spread with local hot rolled coil (HRC) prices, SteelOrbis learned from trade and industry circles on Thursday, November 18.
Indian integrated mills have lowered offers by $10/mt over the past week to $1,100-1,130/mt FOB, but while buyers have been reluctant to make commitments, anticipating the downtrend in ex-China prices will force a stronger correction, Indian sellers have been finding the narrow spreads with local HRC price a disincentive to pushing volumes overseas.
The sources said that Chinese sellers were offering prices at a six-month low in key markets in the Gulf, forcing Indian mills also to cut prices, but buyers have felt the reduction to be too small and the correction to gain momentum, prompting deferment of any immediate bookings.
“The spread between ex-India HDG prices and local prices of HRC is not more than $100-150/mt which is not a sufficient value-addition margin to force sales overseas,” a source at ArcelorMittal Nippon Steel Limited (AMNS) said.
“In the short term, lower export competitiveness is not a problem with strong local demand and prices. But it is to be seen where ex-China prices settle. Buyers will return only once a clear price bottom emerges,” the source said.
Market sources said that a western India-based integrated flat steel producer has reported a modest volume trade of 8,000 mt with a Gulf-based trading firm at a price of $1,100-1,110/mt FOB.