Indian exporters of hot dip galvanized (HDG) coil have maintained their offers unchanged at around $790/mt FOB, but transactions have come to a virtual halt during the past week hit by uncertainties over the recommended Section 232 tariffs in the US, traders said on Thursday, February 22.
Sources said that possibility of imposition of a 53 percent tariff by the US on steel imports from countries like Japan, South Korea and possibly India too, will force a depression in overall export offer prices if shipment volumes to the US are to be maintained.
Under these circumstances, not only will current HDG export offers become irrelevant, it is very unlikely that Indian exporters will be in any position to adjust offers to such sharply depressed market conditions, the sources said
“With a decision on Section 232 slated to be taken by April 11, Indian HDG exporters’ previous decision to hike offers seems to have been counter-productive with buyers continuing to stay away from concluding any transaction amid the threat of a possible import tariff,” a Mumbai-based trader said.
“If the Trump administration takes a decision on imposition of the tariff, HDG exporting Indian steel companies are unlikely to be in a position to compete in depressed markets with counterpart steel exporting companies in South Korea, China or Japan,” the trader added.
However, at least two other traders said that developments in the US will have a limited impact on Indian exporters, as HDG shipment volumes to the US have remained at low levels for the past several months, with Indian steel mills having already shifted the focus of their exports to Southeast Asian markets and the Gulf.