China’s PPGI market posts a minor increase

During the past week China’s domestic PPGI market has registered a small rise, while inventories in the market have seen slight increases.

At present, the prices of CGCC 0.476 mm x 1,000 mm in the Chinese PPGI markets in Shanghai, Guangzhou and Boxing are at RMB 5,800/mt ($850/mt), RMB 6,350/mt ($931/mt) and RMB 5,780/mt ($848/mt) respectively, while CGCC 0.426 mm x 1,000 mm is priced at RMB 5,900/mt ($865/mt), RMB 6,450/mt ($946/mt) and RMB 7,370/mt ($1,081/mt) in the respective areas.

The downstream market has not yet fully resumed its activities, due in part to the cold weather in northern regions in China, and so trading has been slow in the Boxing market in Shandong Province. Meanwhile, PPGI producers have raised their quotations and most traders are holding on to their supplies for the time being.   

At present, PPGI producers in China have many orders in hand. Some producers have raised their ex-factory prices by RMB 50-100/mt ($7-15/mt), though most first and second-tier producers have essentially kept their prices unchanged. However, Shandong Province-based producers Shandong Huijin and Shandong Kelong have increased their prices by RMB 100/mt ($15/mt).

The prices of PPGI in northern China have generally been characterized by stability in the past week. While market activities have resumed since the Spring Festival holiday, demand from the downstream market has not fully recovered and so prices in the north have not seen upward movement.

During the past week, the rise in the domestic PPGI market has been greater than that in hot dip galvanized market, due to the higher inventory levels in the HDG market and also due to the concentration of significant PPGI stocks among large traders which allows them to push up prices with greater ease. Currently, the profit margins in the PPGI market are greater than in the pre-holiday period.