Ex-China hot dip galvanized (HDG) offer prices have edged up amid the rising trend of HRC futures prices as suppliers have been hoping for an improvement in the market situation in the second half of September. Nevertheless, the tradable level has declined further due to poor demand and lower bids.
Offers from mills this week are at $750/mt FOB for late November shipment, edging up by $10/mt compared to September 1 on average. Reference deal prices for ex-China HDG have been heard at $700-720/mt FOB, down by $10-20/mt over the past week. Bids have mostly been at the lower end of the range, while some smaller mills have been considering negotiating at discounted prices to push volumes.
“Rising HRC futures prices have bolstered ex-China HDG prices to some extent, while demand has not improved to the level that market players had expected,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have moved down as demand is not as market players had expected. Meanwhile, HRC futures prices have edged up slightly, which may bolster market sentiment in the near future. HDG producers have resumed production gradually, which will result in sufficient supplies arriving in the market. As the Mid-Autumn Day holiday is approaching, demand may be negatively affected. It is expected that HDG prices in the Chinese domestic market will likely move sideways in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have decreased by RMB 30/mt ($4.3/mt) compared to September 1 to RMB 4,746/mt ($688/mt) ex-warehouse, according to SteelOrbis’ information.
As of September 8, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,802/mt (551/mt), increasing by RMB 75/mt ($11/mt) or 2.0 percent since September 1.
$1 = RMB 6.9148