Chinese galvanized iron may seek slice in Europe

SteelOrbis Shanghai Galvanized coil prices have continued decreasing in China this week; however, European market may grow hopes for Chinese galvanized exporters due to the tight supply situation on the continent. Chinese steelmakers are developing their galvanized steel production qualities day by day, and the beginning of galvanized product exports from some Chinese mills to Europe were reported on our site in the week. According to European sources, the supply situation is tight on the continent, and an increase in the galvanized iron exports from Russia and Ukraine to Europe is observed. However, these countries may fill their quotes before expected; which may give rise to Chinese galvanized iron exports to the Continent. The high galvanized iron price in Europe, which rose also because of high nickel prices, is also another reason that may make Chinese galvanized iron attractive. On the other hand, domestic Chinese market is still gloomy, as galvanized coil prices kept decreasing around RMB 90-100/mt ($11-13) throughout last week. Moreover, the trading volume is still at a low level. Market inventories have increased greatly week on week. In Shanghai, galvanized coil market inventories increased more than 20,000 mt. The market price of hot and cold rolled sheets and coils have already dropped to a low level, leading to a decline in the base price for value added products such as galvanized coils and color coated coils. In addition, the market inventories of galvanized coils climbed up rapidly, compared with the previous weeks. Besides, the market demand is still at a low level because of summer. Although traders have begun to reduce their sales prices rapidly, in line with the rest of the steel market, customers are keeping away from purchases in order to see a further price decline. Benxi Steel and Hengtong Steel announced that they kept their galvanized iron prices unchanged for August. However, the market is not expected to respond accordingly in the short term because of the rapid increase in production. According to statistical data released this week, Chinese mills produced 1.0948 million mt galvanized coils in June, up 23,900 mt from May.