Indian export offers for hot dip galvanized (HDG) have witnessed one of their sharpest falls in recent times in the past week, moving down by $20/mt to $520/mt FOB, in response to too much material available and weakening demand in key markets, traders told SteelOrbis on Thursday, September 26.
Indian exporters have had no option but to respond to weak demand but, despite the drastic pruning of offers, this has failed to trigger any buying interest, indicating too much material chasing too few buyers in depressed market conditions, particularly in key markets like the Gulf Co-operation Council (GCC).
“Indian HDG exports, or the lack of them, are caught in typical sustained bearish market conditions. Exporters are lowering offers in expectation of concluding deals. But buyers are continuing to defer concluding any contracts as in a market which is steadily falling they feel offers are yet to bottom out and are in no hurry to make deals,” a Mumbai-based trader said.
“Competition from China has increased during the past week with ex-China offers being priced more aggressively ahead of the Chinese holidays starting October 1. Indian exporters, despite lowering offers significantly, have not been willing to push buyers into concluding contracts in view of the Indian currency being on an appreciating trend,” the trader added.
Market sources said that only one western India-based steel mill was successful in concluding a contract for end-October delivery with a buyer in the GCC and, though no information on the volume was available, reports in the market suggested that the contract was concluded only after adding a 10 percent incremental discount on FOB basis.