Following a slight increase in ex-China hot dip galvanized (HDG) prices last week, this week most offers from Chinese HDG suppliers have moved down due to sharp drop in futures HRC prices, coupled with lower prices for local HDG in China.
Specifically, offers from large mills are heard at around $585-615/mt FOB for February shipment, decreasing by $10/mt on average compared to December 12, though offer prices from smaller mills are heard at $585/mt FOB.
As a result, the SteelOrbis reference price for ex-China Z120 HDG has settled at $585-615/mt FOB, versus $595-625/mt FOB last week.
During the given week, HDG prices in the Chinese domestic market have seen slight declines amid the decreasing HRC futures prices. Demand from downstream users has been slack, exerting a negative impact on HDG prices. Since the Chinese New Year holiday (January 28-February 4) is approaching, downstream users may be on holiday gradually by the end of December, likely weakening the demand for HDG further. However, the inventory of HDG has been at relatively low levels amid the supply shortage of some specifications, bolstering HDG prices to a certain degree. It is expected that HDG prices in the Chinese domestic market may edge down in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 13/mt ($1.8/mt) compared to December 12, standing at RMB 4,060/mt ($565/mt) ex-warehouse, according to SteelOrbis’ information.
As of December 19, HRC futures at Shanghai Futures Exchange are standing at RMB 3,419/mt ($475.5/mt), decreasing by RMB 143/mt ($20/mt) or 4.0 percent since December 12, while down 1.55 percent compared to the previous trading day, December 18.
$1 = RMB 7.1911
