Large Indian mills have hiked their hot dip galvanized (HDG) export offers over the past week to align them with recent increases in flat product prices, but overseas sales are not being pushed in view of very low exportable volumes and widening bid-offer gaps, SteelOrbis learned from trade and industry circles on Thursday, April 9.
More specifically, indicative offers for ex-India HDG grade Z120 have been increased by an average of $20/mt week on week to the range of $750-785/mt FOB, but most mills have very limited export allocations during the current quarter, having reduced conversion volumes and focused on catering to domestic demand only.
At the same time, issues relating to uncertainties over carbon adjustment border mechanism (CBAM) certification process have stalled trades in Europe, while workable price in the Middle East have remained elusive due to differences over CIF (cost, insurance, freight)-based sales contracts.
“In view of natural gas shortages, mills are optimizing and prioritizing energy resource utilization by resorting to only need-based galvanizing processing and are operating fewer furnaces, resulting in lower HDG output. Hence, exports are not a forefront priority of most large mills,” an associate of Tata Steel Limited told SteelOrbis.
“Flat product prices are being pushed up by mills in Europe, which offers a sliver of optimism for exporters to improve competitiveness. But this, in order to be reflected in the revival of trade, will need to wait for CBAM issues to be sorted out, enabling importers to better assess the impact on final pricing,” he added.
