Strong GI export keeps domestic inventories low

SteelOrbis Shanghai This week, the domestic market prices of galvanized coil remained unchanged. The trading volume was down a little while market inventories increased to some extent. Also during the week, the Chinese authorities released the September production data for galvanized coil. In addition, some steel mills released new ex-factory prices this week. On October 26, the average market price of 1.0 mm galvanized coil is RMB 5,737/mt ($727), up RMB 27/mt ($3) compared with last week; that of 0.5 mm galvanized coil is unchanged at RMB 6,060/mt ($768), while the price of 0.23 mm galvanized coils imported from Indian Bhushan company is RMB 7,200/mt ($911), also remaining stable. This week, the market price of galvanized coil continued its stable tendency. The trading volume went down slightly while market inventories of galvanized coil increased a little. Though the market price of HR and CR continued to decrease this week, the ex-factory price of galvanized coil still remained at a high level. Due to the strong exports of the steel mills, their GI supply to the domestic market did not increase, thus allowing the GI market prices to maintain their steadiness. However, in the long term, the decrease of the HR and CR market prices will influence the market price of GI, while the market risk has been enlarged. As regards zinc, the price in the home market was RMB 33,000/mt ($4,172) this week, thus providing support for the mills' prices. The new prices the steel mills released this week were either stable or else increased slightly. This aided the stability of the market prices. The Chinese authorities this week released the September production data for galvanized coil. According to the new figures, the September galvanized coil production of China's steel mills was 1,169,800 metric tons, up 23,500 metric tons compared with August. Also this week, the new ex-factory price of Tangshan Hengtong galvanized coil remained unchanged, while that of Jiangyin UnionSteel galvanized coil increased RMB 200/mt ($25).