During the past week China's domestic pre-painted galvanized iron prices have continued to fall. For example, the price of CGCC 0.476 mm x 1,000 mm x C material produced by Wuxi NewDaZhong has decreased to RMB 5,600/mt, down from RMB 5,800/mt last Friday.
This week PPGI prices in China have stayed on their downward track, mainly because local HR prices accelerated their decreasing movement this week, which affected the confidence of PPGI traders and thereby caused market prices of PPGI to decrease further. Meanwhile, PPGI mills continued to lower their ex-works prices, exerting a negative impact on spot prices. On the other hand, the improvement in weather conditions is boosting demand levels and so the transaction situation is getting better. In addition, current market prices are very close to cost levels, which means that spot prices are unlikely to see any further large decrease. However, as the long break for China's National Day holiday (October 1-8) approaches, most traders still do not have much confidence in the later market as inventories are likely to accumulate during the holiday period. As a result, most traders are still maintaining a wait-and-see aproach for the time being.
As for the export situation, in August China's exports of pre-painted galvanized plates and strips reached 90,519.28 mt, 9.85 percent lower than the July level of 100,413.577 mt. Turning to the import situation, in August China's imports of the same materials came to 29,221.152 mt, 4.26 percent higher than the July figure of 28,028.02 mt.
As for the domestic mills, this week Masteel decreased its PPGI ex-works prices for October by RMB 600/mt ($87/mt). The producer's price for 0.5 mm TSGCC material is now at RMB 6,020/mt ($882/mt), excluding 17 percent VAT. Also, Wuxi Zhongcai Group this week decreased its PPGI ex-works prices for October by RMB 300/mt ($43/mt). The producer's price for 0.5 mm CGCC is now at RMB 5,850/mt ($857/mt), including 17 percent VAT.
Based on the situation observed this week, PPGI prices are still likely to decline during the next few weeks. However, as demand is getting better, the decrease margin is expected to be limited.