Ex-China hot dip galvanized (HDG) offer prices have moved down sharply this week in tandem with lower trade activity and significant declines in local and futures prices.
Offers from mills this week are at around $700/mt FOB for late July shipment, decreasing by $40/mt compared to May 18 on average. Reference deal prices for ex-China HDG have been heard at $690/mt FOB and below, versus $700-710/mt FOB last week. However, according to sources, some offers have already been heard at as low as $650/mt FOB from a number of Chinese suppliers.
“The prevailing cautious sentiments among market players have negatively affected HDG prices, while decreasing iron ore prices have also weakened the support for HDG prices,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have decreased amid the slack demand from downstream users. At the same time, HRC futures prices have moved down sharply, exerting a negative impact on the HDG market. However, HDG producers’ capacity utilization rates have continued to decline, which has provided support for HDG prices. It is thought 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 lost RMB 43/mt ($6.1/mt) compared to May 18, standing at RMB 4,607/mt ($653.5/mt) ex-warehouse, according to SteelOrbis’ information.
As of May 25, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,532/mt (501/mt), decreasing by RMB 229/mt ($32.5/mt) or 6.1 percent since May 18.
$1 = RMB 7.0529
