China’s domestic PPGI market still rises, transaction volumes normal

During the past week, China's domestic PPGI market has remained on an uptrend, with market transactions observed to be at normal volumes. A slight gap has been noted between the prices of domestic private sector steel mills and large-size state-owned steel mills.

At present, the prices of CGCC 0.476 mm x 1,000 mm in the Chinese markets of Shanghai, Guangzhou and Boxing are at RMB 6,700/mt ($982/mt), RMB 7,300/mt ($1,070/mt) and RMB 6,650/mt ($975/mt) respectively, while CGCC 0.426 mm x 1,000 mm material stands at respective prices of RMB 6,750/mt ($990/mt), RMB 7,400/mt ($1,085/mt) and RMB 8,050/mt ($1,180/mt) in the markets in question.

Current domestic PPGI prices of both private sector producers and large-sized state-owned mills are rather high, affected by the increased prices of hot dip galvanized materials and high processing costs. The privately-owned mills have sought to lower their processing costs, in order to keep production at normal levels and attract customers. Meanwhile, China's domestic price of paint has risen slightly and, with the private sector PPGI producers reducers seeking to reduce processing costs, their product quality is reported to have seen some negative effects. Some customers have preferred to purchase from the large-scale PPGI producers, even at slightly higher prices.

It is reported that both domestic and export trade for Chinese PPGI is at normal levels. On the export side, quotations of 0.35 mm × 1,000 mm × C Z120 from domestic traders have been heard at $1,075/mt CFR Turkey. Because of the uncertain cost of HDG feedstock and the shortage of HDG supplies, PPGI mills have been limiting their orders.

Inventories at most PPGI producers are not very high, while end-users are willing to accept the current prices. It is expected to be more difficult for prices of PPGI to rise in the Chinese market in the coming period.