Ex-China hot dip galvanized (HDG) offer prices have moved up sharply in the past week, but the tradable level has not changed much after last week’s decline. The Chinese mills, who have increased their offers, have had limited allocation and have not been willing to export aggressively. Offers are at $875-880/mt FOB for late March shipment this week, up by $60/mt on average compared to one week ago amid the appreciation of Chinese currency and limited supply, though buyers have been unwilling to conclude deals at the current high levels. The tradable value has remained at last week’s level of $770/mt FOB or even below in the Asian market.
“The appreciation of the Chinese currency has exerted a negative impact on HDG exports, and so market players are pessimistic towards transaction activities for HDG exports in the near future,” an international trader said.
During the given week, the New Year holiday negatively affected demand for HDG in the local market, weakening the support for prices in the spot market. Meanwhile, downstream buyers have been cautious as regards concluding HDG purchases. However, the relatively low inventory levels of HDG have bolstered prices to some extent. At the same time, the Covid-19 pandemic has worsened in Hebei Province, which may exert a negative impact on steel production and supply to the market. 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 56/mt ($9/mt) week on week to RMB 6,160/mt ($954/mt) ex-warehouse, according to SteelOrbis’ information.
As of January 7, HRC futures prices at the Shanghai Futures Exchange are standing at RMB 4,657/mt ($721/mt), increasing by RMB 103/mt ($4.6/mt) or 0.65 percent since December 31.
$1 = RMB 6.4608
