Amid a sustained absence of buying interest, Indian exporters’ hot dip galvanized (HDG) coil offers reversed their upward movement during the past week, decreasing by $20/mt week on week to $760/mt FOB though without having any significant impact on the low activity in the market, traders said on Thursday, May 17.
“Of course, the rupee depreciating to above the INR 68 to the US dollar mark provided a window for local HDG exporters to lower offers. However, clearly no pricing strategy implemented by exporters is having success in triggering any fresh buying interest,” a Mumbai-based trader said.
“While US buyers have been out of the local market for some time, buyers in the Gulf region are also unwilling to conclude transactions in view of the expected fall in business activity during Ramadan,” the trader added.
However, according to two other traders the cut in offer levels and the virtually insignificant transaction volumes are not the main focus of most exporting large domestic steel mills in view of strong domestic demand.
The traders pointed out that exporters had hiked offers early in the month to keep the HDG price differential between domestic and export offers to a minimum. But with domestic demand remaining strong, reducing the price differential is not so important for the mills now.
On the other hand, most of these steel mills have shifted the focus of their export thrust to Southeast Asian markets where their export portfolio mostly comprises other flat products like HRC and CRC, the traders added.