Ex-China hot dip galvanized (HDG) prices have remained relatively stable over the past week, or have been showing only a slight downward bias given the worse sentiment mounting in the local HDG market affected by declines in HRC futures prices.
Specifically, offers from large mills are heard at around $590-595/mt FOB for June shipment, moving sideways since April 24, while offer prices from smaller mills are heard at $575-585/mt FOB, down by $5/mt week on week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $575-595/mt FOB, compared to $585-595/mt FOB last week.
During the given week, HDG prices in the Chinese domestic market have indicated decreases amid declining HRC futures prices. Inventory of HDG has been at a relatively high level, weakening the support for prices. Meanwhile, demand for HDG has been slack, exerting a negative impact on market sentiments. Following the Labor Day holiday (May 1-5), downstream users have still not been eager to restock. However, the People’s Bank of China has decided to cut the reserve requirement ratio (RRR) for Chinese banks by 0.5 percentage points effective as of May 15 and to lower the interest rate for individual housing provident fund loans by 0.25 percentage points as of May 8, which may bolster market sentiments in the short term.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have decreased by RMB 57/mt ($7.9/mt) compared to April 24, standing at RMB 3,953/mt ($549/mt) ex-warehouse, according to SteelOrbis’ information.
As of May 8, HRC futures at Shanghai Futures Exchange are standing at RMB 3,191/mt ($443/mt), decreasing by RMB 13/mt ($1.8/mt) or 0.4 percent since April 24, while down 1.18 percent compared to the previous trading day, May 7.
$1 = RMB 7.2073