Before May, the PPGI prices almost kept flat due to the relatively stable market situation compared with other products. However, after the three-day holiday at the beginning of May, China's PPGI spot prices have registered an obvious increase following the increasing trend of HR, CR, HDG, rebar and wire rod. But as for inventories, PPGI inventories level do not show much sign of decrease. On the contrary, with the domestic prices jump up, those PPGI mills that stopped production or cut down production previously have resumed production. In the coming days we can see that PPGI inventories will jump up as well. As for demand, the transaction volume does have an improvement currently. Some downstream purchasers, who had bought only to satisfy their needs previously, did increase their purchasing volume due to the increasing prices. But overall, the transaction situation is still plain. Now PPGI traders still have a wait-and-see attitude as they are not very confident about how long this wave of increase will last. We also think with the inventories getting increasing, the upward trend will not last too long.
With regard to the export situation, CGCC 0.3 mm × 1,250 mm × C is now being offered at $720/mt FOB CMP by some joint steel mills in east China. However, according to many international traders, it is still hard to export PPGI due to the poor global environment.
Based on the situation observed this week, the upward movement in China's domestic PPGI market may continue to move on this increasing trend within the coming week. Nevertheless, with the inventories getting higher and the still plain transaction situation, we believe that the increasing trend will soon stop.