Indian exporters’ hot dip galvanized (HDG) coil offers have increased by a significant margin of around $20/mt week on week to $720/mt FOB, largely driven by strong domestic demand even without any significant change in the ongoing situation of weak interest from overseas buyers, traders said on Thursday, November 23.
“There has not been any revival of buying activity, particularly from the US, that would have warranted the sharp increase in offers,” a Mumbai-based trader said.
“The fact that large exporting steel mills have effected an increase in offers clearly indicates strong domestic demand and that mills are focusing on demand in India, and hence higher export offers will enable them to have a higher benchmark price for domestic transactions,” the trader added.
At least two other traders pointed out that the increase in export offers is largely notional since export transactions have been insignificant over the past month in the face of competition from ex-China HDG offers which in contrast have been softening. They said that, while the hike in offers is "confusing against current buying trends", its impact on domestic pricing is "tenuous" as local buyers are unlikely to accept "export parity" pricing either.
However, highlighting the differences in view over the latest increase in HDG export offers, two other sources said that Indian exporting steel mills are "just staying ahead of the curve" anticipating a strong revival in HDG demand in Europe and rising Chinese domestic HDG prices, which in turn would reverse the current sluggishness of ex-India HDG shipments.
