During the past week 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 5,080/mt, up from RMB 5,000/mt last Friday.
This week domestic PPGI prices have continued to climb up in line with the rising trends observed for other finished steel products in China. However, the transaction situation is now not as good as over the last two weeks as there have been indications, e.g. in HR, CR and construction steel, that the finished product markets may start to decline. As a result, traders are not so confident about the prospects for the future market. Also, downstream purchasers purchased significant quantities when prices began to increase and are now more cautious and lack the same desire to purchase material. Most traders believe it is now a dangerous time to build up inventories despite the increasing prices, as they think the market is soon likely to move on a stable trend or even decline. Both traders and downstream purchasers are now maintaining a wait-and-see attitude to the market. Next week seems set to be a key period for the major steel products such as HR, with the future trend for such markets expected to gain greater clarity. For PPGI, however, prices are most likely to continue to increase as this market generally follows the other markets with a certain delay.
With regard to exports, CGCC 0.3 mm × 1,250 mm × C material is now being offered at $720/mt FOB CMP by a steel mill in eastern China, the same level as last week. Traders still face difficulties in performing exports.
Based on the situation observed this week, the upward movement in China's domestic PPGI market may continue into next week. Later, however, following the likely movement of other domestic finished product markets, the local PPGI market may start to post a stable or even declining trend.