During the past week China's domestic pre-painted galvanized iron prices have continued to rise. For example, the price of CGCC 0.476 mm x 1,000 mm x C material produced by Wuxi NewDaZhong has increased to RMB 6,250/mt, up from RMB 6,200/mt last Friday.
Due to low inventories PPGI prices in China have not posted any decline even though other steel prices have started to decrease in the past week. Of course, the transaction situation for PPGI in the domestic market is not good as purchasers are waiting for prices to decrease and as demand in this season is traditionally low. İn addition, spot prices have reached really high levels and downstream users are beginning to adopt a wait-and-see stance. Although Baosteel this week hiked its ex-works prices for flat products for September, this increase has not had any obvious impact. This week steel futures prices also decreased sharply, exerting a strong negative impact on the confidence of traders in the spot market. China's steel market is now indicating its first obvious decrease since May, and PPGI prices are likely to follow this general decreasing movement soon. Nevertheless, given the low levels of PPGI inventories, the decrease margin is not expected to be big.
As for domestic mills, Baosteel Group this week issued its PPGI ex-works prices for September, raising its levels by RMB 600/mt ($87/mt). As a result, the producer's price of 0.5 mm TDC51D stands at RMB 6,837/mt ($1,001/mt), excluding 17 percent VAT.
Based on the situation observed this week, although strong decreases have been seen in China's steel markets, local PPGI prices remain on their rising track for the time being. However, in the next few weeks China's PPGI prices will also follow the downward trend of other steel products.