Ex-China hot dip galvanized (HDG) offer prices have remained stable, with demand not improving to the level that market players had expected. At the same time, the decrease in HRC future prices and local HDG quotations have weakened the support for exporters.
Offers from mills this week are at $705-715/mt FOB for late November shipment, moving sideways compared to September 7 on average. Meanwhile, reference deal prices for ex-China HDG have been heard at $675-705/mt FOB, the same as last week.
“Demand from downstream users has not improved to the level that market players had expected, weakening HDG prices, market players still look forward to replenishment ahead of the long holiday, which will likely bolster the HDG market in the coming period,” an international trader said.
During the given week, HRC futures prices have moved down, negatively affecting market sentiments and HDG prices, while demand for HDG has not seen a significant improvement yet. However, major Chinese steelmakers, including Baosteel and Anshan Iron and Steel, have raised their ex-works prices for HDG for delivery in October by RMB 100/mt ($14/mt), exerting a positive impact on spot prices. Iron ore prices are at relatively high levels, bolstering HDG prices from the cost side. It is thought that HDG prices in the Chinese domestic market may rise in the coming week as there may be stock replenishment ahead of the long National Day holiday (September 29-October 6).
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 46/mt ($6.4/mt) compared to September 7, standing at RMB 4,857/mt ($675.5/mt) ex-warehouse, according to SteelOrbis’ information.
As of September 14, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,868/mt (538/mt), edging down by RMB 12/mt ($1.7/mt) compared to September 7.
$1 = RMB 7.1874