Indian hot dip galvanized (HDG) coil exporters have continued to push up prices for consecutive weeks on the back of rising flat steel markets across Asia and the persistent shortage of hot rolled coil (HRC) available for conversion, resulting in low export allocations by Indian domestic integrated steel mills.
Market sources said that integrated steel mills have increased ex-India HDG prices by $15/mt to $645-650/mt FOB, with producers citing low availability of HRC for captive conversion coupled with the rise in zinc prices in the local market and rising import dependency leading to a cost-push impact on prices.
They said that zinc prices have increased from INR 170/kg to INR 220/kg over the past one month, coupled with freight rates also having almost doubled over the past two months.
The sources said that buyers from the Gulf region have been accepting higher prices for HDG, as the possibilities of a correction have been ruled out as flat product export prices are increasing across all global markets but higher bid volumes have been either rejected or bookings reduced as local steel mills have not had sufficient inventories to guarantee January-February deliveries.
Buying interest from the EU region has also been sustained despite the second wave of the pandemic spreading in some countries, which also supported the sustained increase in ex-India HDG prices, the sources said.
The sources said a western India-based flat steel integrated steel mill has reported a trade for an estimated volume of around 20,000 mt with a Gulf-based trading firm at around $645/mt FOB for February delivery.
The same producer has also reported a trade of around 30,000 mt with an EU-based buyer for February delivery at around $650/mt FOB, the sources said.
A Maharashtra-based integrated steel mill concluded a deal for around 20,000 mt with a Gulf-based trading firm at $645-650/mt FOB for end-of-January delivery, the sources said.