During the last two weeks China's domestic pre-painted galvanized iron prices continued their rising 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 5,230/mt, up from RMB 5,130/mt on May 22.
These past two weeks China's domestic PPGI prices have continued to climb up despite the fluctuating movements observed in the local markets for HR, CR and other steel products. The transaction situation is not great due to the continuing weakness of demand. However, with inventories shrinking and HDG prices still increasing, domestic PPGI prices have remained on their rising trend. Nevertheless, in the longer term, as demand has failed to show any obvious improvement so far and as the current increase trend has been continuing for over one month now, it is thought that the rising movement will level off and be replaced by a more stable trend. At the moment, downstream users are maintaining a wait-and-see stance and are showing caution as regards purchases. In addition, most traders are also uncertain as regards the future market direction. Overall, both sellers and buyers are showing caution for the time being as they wait for further indications of the future market trend.
As for domestic mills, Jiangsu Province-based Panhua Steel this week issued its ex-works prices for June, increasing its PPGI prices by RMB 400-650/mt ($58-95/mt) from May price levels. Thus, the producer's price of 0.47 mm CGCC is at RMB 5,260/mt ($770/mt). WISCO this week also issued its new ex-works prices for July, in which it kept its PPGI prices unchanged from June levels. Thus its price for 0.5 mm WLC is now at RMB 5,435/mt ($795/mt). Given the continuous rise in domestic market prices, more mills are expected to raise their PPGI ex-works prices.
Based on the situation observed this week, the upward movement in China's domestic PPGI market may soon come to a halt due to weak demand. Also, after such a long, continuous increase in prices, there is a significant possibility that some price correction will be seen at a later stage.