Indian exporters’ hot dip galvanized (HDG) offers have increased by around $20/mt week on week to $780/mt FOB, to maintain a balance with rising domestic prices of flat products, but this has turned off overseas buyers with negligible transactions being reported during the past week, traders said on Thursday, May 10.
“Indian exporters are adopting a contrarian and counter-productive export pricing strategy in view of the depressed prices in Gulf markets and the rapid depreciation of the Indian currency,” a Mumbai-based trader said.
“Of course, steel mills exporting HDG have been compelled to increase offers in view of the sharp and sustained rise in domestic flat product prices and to minimize the gap between domestic and export price. The risk of buyers being turned off from Indian HDG exports is low on the priority of exporting mills considering the strong domestic demand in India,” the trader added.
At least two other traders said that buyers from Gulf Cooperation Council markets were seeking $30-40/mt discounts on offer prices but no transactions have been reported as exporters have been unwilling to accede to the discount requests of buyers.
The loss of buyers is also significant as ex-China HDG offers are being kept stable against the backdrop of the soft prices in the Gulf and the weak buying interest caused by the approach of Ramadan and the expected fall in business activity in the region, the two traders added.