Large Indian mills have increased hot dip galvanized (HDG) coil export offers over the past week responding to rising galvanizing furnace operation costs and tighter supplies of coils for conversion and, even though no deals have been confirmed, the rise in the number of bids received has triggers sellers’ optimism, SteelOrbis learned from trade and industry circles on Thursday, May 21.
Sources said that ex-India HDG (grade Z120) prices have been quoted at least $20/mt higher in the range of $770-800/mt FOB, with a greater number of bids reported from Gulf Cooperation Council (GCC) markets, which were heard to be “under active negotiations”. According to the sources, sellers’ optimism is based on bid levels improving to the range of $750-760/mt FOB in the Middle East, compared to lows of $700-730/mt FOB which could be workable, subject to a buyer-seller consensus on logistical and shipping delivery terms.
“We cannot disclose ongoing negotiations with our customers. But we can confirm that we are constantly working on client development across markets and getting a very positive response. There are big challenges in converting bids to final sales contracts, i.e., arriving at an acceptable FOB-based price and then working towards a final cost, insurance freight-based sales contract. Freight rates have gone up 28-30 percent for deliveries to the Middle East since the war broke out,” an official at an exclusively flat steel producing mill told SteelOrbis.
“Demand and prices are moving positively in key markets. Our focus is on achieving optimal margins on our overseas sales,” he added.
Furthermore, ex-India HDG (grade Z275) offers in Europe have been reported at $910-915/mt CFR, the same as last week, which translates to around $830/mt FOB, though no deals have been reported so far.
