With China's domestic PPGI prices experiencing a continuous rise over two months and reaching high levels, the transaction situation is currently not so good. Meanwhile, the traditional low season for the steel industry has arrived. To prevent possible risks, traders are showing caution as regards stocking activities and so inventories in the market are not high. Downstream buyers are maintaining a wait-and-see attitude to the market and are also more cautious in terms of making purchases due to the hotter weather. Local HDG prices have begun to fluctuate and this will surely have an influence on the movement of PPGI prices. Moreover, the annual iron ore talks are currently deadlocked, which adds to the lack of certainty surrounding the market situation.
As for the domestic mills, Union Steel China this week issued its PPGI ex-works prices for July. The price of the producer's 0.5 mm CGCC now stands at RMB 6,480/mt ($948/mt), including 17 percent VAT, i.e. RMB 350/mt ($51/mt) higher than the June level. In general, PPGI mills in China are still expecting higher prices.
Based on the situation observed this week, although the upward movement in China's domestic PPGI market still continues, this movement appears to have become milder due to decreasing demand. With a wait-and-see atmosphere become more prevalent in the market, the transaction situation is likely to remain dull with prices expected to move within a relatively limited margin.