Galvanizers hike prices under strong export

SteelOrbis Shanghai Last week, the main event in Chinese galvanized products market was the increase in ex-factory prices, which also boosted the market prices. Sharp price increases led trade volume to remain unchanged. Nevertheless, domestic market inventories are still low. Foreign demand for Chinese galvanized coils is strong and galvanized coil export prices are high. Therefore, major Chinese mills such as Benxi Steel, the ruling galvanizer in China, only provide very little galvanized products to the domestic market. Although Benxi Steel announced its ex-factory price list for domestic market, it has even cancelled the orders from domestic customers for June. The domestic price announcements of such mills are rather presented as an excuse to their export price hikes. Furthermore, other mills including Baosteel have also increased their galvanized product ex-factory prices, which led traders to boost their prices one after the other. Last week, Baotou Steel increased its galvanized coil prices by RMB 400/mt ($50), Benxi Steel by RMB 350/mt ($44), Baosteel by RMB 400/mt ($50), Handan Steel by RMB 400/mt ($50), and Jiangyin UnionSteel by RMB 400/mt ($50). The traders are aiming to keep the trade volume under control and sell their products at higher prices in June, because the tight supply situation will become more serious that month.