During the past week China's domestic pre-painted galvanized iron prices maintained a stable trend. For example, the price of CGCC 0.476 mm x 1,000 mm x C material produced by Wuxi NewDaZhong now stands at RMB 4,900/mt, the same level as last Friday.
At present domestic PPGI inventories remain high; however, following their previous continuous decrease, PPGI market prices this week temporarily moved on a stable trend. As the export rebate rate for HDG and PPGI has been raised to 13 percent, the situation of Chinese galvanized exporters has improved compared to before. However, due to the poor global economic environment, export activity is still difficult and the current transaction situation is not good. This week domestic prices for long products, HR and CR registered an obvious upward movement, which caused a sudden switch from pessimism to optimism in traders' attitudes. Although a similar improvement has not been seen as regards HDG and PPGI, traders believe that, despite the poor demand, a wait-and-see policy is the best choice at the current time and that for the moment it is better not to reduce prices. Thus, spot market PPGI prices have practically remained flat this week.
As for the domestic mills, Ansteel this week issued its ex-works prices for May, reducing CR prices by RMB 250/mt from April levels, decreasing HR prices by RMB 260/mt and HRP prices by RMB 400/mt. All prices exclude VAT. Thus, these adjustments reflect the pessimistic mentality of mills as regards the outlook for flat products, and will also influence traders' expectations of the future price trend for flat steel.
Based on the situation observed this week, China's domestic PPGI market is likely to register a fluctuating movement next week as most other steel products in China have shown a sudden rising movement. It is likely that the PPGI market will start to follow the general upward trend next week. However, due to poor demand and high inventories, if the increase happens, it will not last for long.