During the past week China's domestic pre-painted galvanized iron prices followed a flat trend. For example, the price of CGCC 0.476 mm x 1,000 mm x C material produced by Wuxi NewDaZhong has increased to RMB 5,850/mt, the same level as last Friday.
After nearly three months of continuous increase, domestic PPGI prices in China have this week entered a relatively stable trend. Although local mills are still raising their ex-works prices with the aim of pushing market prices up, they have not achieved any obvious results. With prices now having reached relatively high levels, the transaction situation is not so good and so inventories are fairly high. In addition, the low season for the domestic steel industry has arrived and, as a result, some traders are worried there will soon be a decline in the local PPGI market..Traders are maintaining a wait-and-see stance; they consider that the steel market appears to be prosperous and can still reach even higher levels. Even with high inventories and a dull transaction situation, no one in the market is willing to decrease prices at the current time. Thus, flat movement or small fluctuations in prices may continue for some time.
As for the domestic mills, Bensteel this week issued its PPGI ex-works prices for August. The price of the producer's 0.47 mm TDC51D now stands at RMB 5,750/mt ($841/mt), excluding 17 percent VAT, i.e. RMB 500/mt ($73/mt) higher than the July level. This week the mills' hiked prices have had little or no influence on the spot market.
Based on the situation observed this week, with inventories increasing and the transaction volume not great, in the coming period Chinese domestic PPGI prices may register a flat movement with small fluctuations and could eventually start to decline.