During the past week China's domestic pre-painted galvanized iron prices started to decline. For example, the price of CGCC 0.476 mm x 1,000 mm x C material produced by Wuxi NewDaZhong has declined to RMB 6,200/mt, down from RMB 6,250/mt last Friday.
With steel futures prices in China decreasing sharply again this week, domestic spot prices of steel continued to drop. However, coming up to the end of the week, due to low inventories and upward adjustments of ex-works prices by leading mills, the prices of some steel products indicated a rebound. As for domestic PPGI prices, the decrease margin has been small because of low inventory levels and also since the previous increase for PPGI prices had not been as strong as compared to the uptrends observed for other steel products.. This week both Ansteel and Bensteel raised their ex-works prices. Although the increase margins in question were not so big, they still helped to stabilize the market and to reassure traders. In this context, spot prices for PPGI are expected to fluctuate within a limited margin over the next few weeks, while downstream purchasers are likely to maintain a wait-and-see approach to the market given the current low season.
As for the domestic mills, Ansteel this week issued its PPGI ex-works prices for September, raising its levels by RMB 200/mt ($29/mt). As a result, the producer's price of 0.5 mm TDX51D+Z stands at RMB 5,600/mt ($819/mt), excluding 17 percent VAT. Bensteel this week issued its PPGI ex-works prices for September, raising its levels by RMB 200/mt ($29/mt). As a result, the producer's price of 0.476 mm TDC51D stands at RMB 5,950/mt ($871/mt), excluding 17 percent VAT.
Based on the situation observed this week, although an obvious decline has been seen in China's steel markets, local PPGI prices are likely to continue to fluctuate due to low inventories and may not register sharp decreases such as seen in the case of other steel products.