During the past week China's domestic pre-painted galvanized iron prices continued to increase. For example, the price of CGCC 0.476 mm x 1,000 mm x C material produced by Wuxi NewDaZhong has increased to RMB 5,600/mt, up from RMB 5,300/mt last Friday.
This week spot PPGI prices in the local Chinese market have continued to climb up on the back of the rising trends in the local HR, CR and HDG market. PPGI inventories in China are not high currently, and the mills are still producing at full capacity due to the continuous increase of prices. Last week Bensteel issued its PPGI ex-work prices for July, announcing an increase of RMB 400/mt ($58/mt) compared with June. The optimistic expectations of leading mills have also added impetus to the upward price movement. However, the transaction situation is not as good it was before, since prices have now reached a relatively high level. Also, with the weather getting warmer, demand will be influenced negatively. Downstream buyers generally decrease their purchasing budget over the next two months, which are usually the hottest of the year. In this context, the current increasing trend may soon come to an end.
As for the domestic mills, Masteel this week issued its PPGI ex-works prices for July. As a result, the price of the producer's 0.5 mm TSGCC now stands at RMB 5,990/mt ($877/mt), including 17 percent VAT. In addition, Huangshi steel is reported to have raised its PPGI ex-work prices by RMB 400/mt ($58/mt) for July. With prices still on the way up, PPGI mills have remained very confident about the market.
Based on the situation observed this week, the upward movement in China's domestic PPGI market is likely to continue into next week. However, given the situation as regards transactions and the declining demand levels, the market is expected to follow a more moderate trend in the next few weeks.