Galvanized market brisker this week

SteelOrbis Shanghai Galvanized coil prices increased around RMB 250-330/mt ($31-41) week on week. The trading volume enlarged to some extent and the market inventories dropped a little. As Chinese Government's awaited cutback of the value added tax rebate on imports has been postponed, steel mills have begun to strengthen their exports, which caused to a further decline in domestic galvanized coil market supplies. Furthermore, domestic market demand increased and trading volume enlarged more. Adding the continuous ex-factory price increases of steel mills led to sharp rises in galvanized coil market prices. This week Panzhihua Steel increased its galvanized coil ex-factory prices by RMB 500/mt ($62), Angang by RMB 500/mt ($62), and Tangshan Hengtong by RMB 300/mt ($25). According to the latest statistics, Chinese steel mills produced 1.0234 million metric tons of galvanized coils in April, down 190,300 metric tons compared with March. Meanwhile, China's galvanized coil imports increased 12,800 metric tons month on month to 331,100 metric tons in April, while the exports decreased 52,500 mt to 135,000 metric tons. The imports' increase represents a rebound in domestic demand. On the other hand, although the exports are currently picking up, the possible cutback of tax rebate may lead to a decline later, and bring a pressure on domestic market.