During the week ending October 28, pre-painted galvanized iron (PPGI) prices in the Chinese domestic market have registered further declines, amid sluggish buying activity. As of October 28, the average sales prices of PPGI in the main Chinese cities are as follows:
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
PPGI |
0.476 mm x 1,000 mm |
CGCC |
6,567 |
-50 |
1,039 |
-8 |
PPGI |
0.426 mm x 1,000 mm |
CGCC |
7,183 |
-50 |
1,137 |
-8 |
At present, CGCC 0.476 mm x 1,000 mm PPGI is sold in the Shanghai, Guangzhou and Boxing markets at RMB 6,450/mt ($1,021/mt), RMB 6,900/mt ($1,092/mt) and RMB 6,350/mt ($1,005/mt) respectively. At the same time, CGCC 0.426 mm x 1,000 mm PPGI prices stand at RMB 6,550/mt ($1,036/mt), RMB 7,000/mt ($1,108/mt) and RMB 8,000/mt ($1,266/mt) in the above respective markets. All prices include 17 percent VAT.
The sales prices of PPGI in the main Chinese cities have continued to decline, though the lower prices have failed to boost purchase activity. Traders now need to pay for previous bookings as October draws to a close, and so they are under pressure in terms of availability of funds. Given their pessimism on the prospects for the market in the future, traders prefer to lower their inventories. In this context, there is some confusion in traders' offers as they compete with each other for orders. On the other hand, the reduced availability of loans from the banks coming towards the end of the year is putting pressure on the whole market. Accordingly, shortage of funds is a major factor limiting demand from downstream users.
In addition, private sector steel mills' inventories are at high levels, and if they do not reduce production in the short term they will come under increasing pressure from their stocks.
It is expected that the PPGI market in China will find it hard to shake off its downtrend in the near term.