Ex-China HDG offers have edged down slightly over the past week, despite a modest improvement in China’s HRC futures market. Local HDG prices have also decreased, exerting a negative impact on market sentiments.
Specifically, offers from large Chinese mills have been heard at around $580-595/mt FOB for January shipment, compared to $585-600/mt FOB last week, while offer prices from smaller mills have been heard at $560-580/mt FOB, down by $5/mt on average week on week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $560-595/mt FOB, versus $565-600/mt FOB last week.
Besides, according to sources, several deals for ex-China HDG Z40 have been voiced at $530-535/mt FOB, and at around $565/mt CFR for Z140 HDG.
At the same time, market players have been lacking confidence as regards the future prospects for the local HDG market, which will weaken the support for prices. Most sources believe that traders might be operating near the breakeven point. Meanwhile to stimulate transaction activities and reduce inventories amid sluggish demand from downstream users, traders may cut prices further.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 17/mt ($2.4/mt) compared to November 13, standing at RMB 3,860/mt ($544/mt) ex-warehouse, according to SteelOrbis’ information.
As of November 20, HRC futures at Shanghai Futures Exchange are standing at RMB 3,267/mt ($460/mt), decreasing by RMB 13/mt ($1.8/mt) or 0.4 percent since November 13, while down 0.55 percent compared to the previous trading day, November 19.
$1 = RMB 7.0905
