Ex-India hot dip galvanized (HDG) coil trading has been kept alive by some discounted deals in Africa and the Gulf region, but the overall outlook is still negative as the competition with ex-China HDG has increased even more and Indian suppliers have very limited options as regards where to sell, SteelOrbis has learned from trade and industry circles.
The reference deal prices for Z120 Indian HDG have been at $830-850/mt FOB with the midpoint at $840/mt FOB, down by $20/mt over the past week. And even these prices can be accepted only by some buyers in limited destinations, as most customers have cheaper ex-China options and are not interested in higher-priced ex-India material.
Sources said that, while official offers have been maintained at $870/mt FOB, a western India-based integrated mill has reported a trade for 8,000 mt with a trading arm of a South Africa-based automobile manufacturer and, though a discount was confirmed, the price net of discount was not disclosed by either seller or trade circles.
Similarly, another Indian mill reported a trade for 3,000 mt with a Gulf buyer for December shipment, but the price net of discount was not available, though a section of the market speculated it was around $840-850/mt FOB.
“Our assessment is that the discounted deal is more an attempt to deepen market presence in Africa and maintain long-term buyers in the Gulf. However, at the same time, prices have fallen so sharply in the US and the EU that a market bottom might be near. But these are hazardous predictions considering uncertain macro indicators like energy shortages and rising interest rates and inflation,” an official at a mill which has had no export presence for the last two months said.
“There are expectations of some modest buying emerging in the EU, particularly from markets like Italy and Spain owing to natural stock drawdowns in the absence of the prolonged absence of [JF1] restocking by consuming industries. But acceptable price levels are still not clear,” he said.
However, maintaining a contrarian view, an official at a government mill said that any short-term buying revival would have little impact on prices as a lot of ex-China material is flowing into western markets and at the same time reports of the US steel imports in September touching their lowest since 2021 will provide headwinds for Indian exporters’ expectations of higher prices.