During the past week China's domestic pre-painted galvanized iron prices continued to decline. For example, the price of CGCC 0.476 mm x 1,000 mm x C material produced by Wuxi NewDaZhong has declined to RMB 5,800/mt, down from RMB 5,850/mt last Friday.
This week PPGI prices in China continued to decline due to the dull transaction situation. Also this week, leading Chinese mill Baosteel decreased its PPGI prices significantly, thereby pulling down PPGI prices in the spot market. Although steel futures prices and certain spot prices such as for HR and rebar have shown some rebound towards the end of this week, this has not changed the downward direction of PPGI prices. Inventories in the market are relatively high at present. As mentioned, the transaction situation for PPGI is not good, and so some small mills have even stopped production. On a more optimistic note, demand traditionally improves with the approach of autumn, while the rebound movement in HR and rebar may also be expected to exert a gradual influence on PPGI prices, perhaps resulting in a rebound in the PPGI market also in the very near future.
As for the domestic mills, Baosteel this week decreased its PPGI ex-works prices for October by RMB 350/mt ($51/mt). The producer's price for 0.5 mm TDC51D now stands at RMB 6,507/mt ($952/mt), excluding 17 percent VAT.
Based on the situation observed this week, although local PPGI prices in China have remained on their downward track, it is likely that the decrease movement will be more moderate in the coming week.