During the past week ending March 25, Chinese domestic sales prices of pre-painted galvanized iron (PPGI) have declined slightly. Most traders have remained on the sidelines, while some are not very optimistic on the prospects for the future market. As of March 25, 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 |
6,723 |
-17 |
1,026 |
-3 |
PPGI |
0.426 mm x 1,000 mm |
CGCC |
7,367 |
-16 |
1,125 |
-2 |
At present, CGCC 0.476 mm x 1,000 mm PPGI is sold in the Shanghai, Guangzhou and Boxing markets at RMB 6,650/mt ($1,015/mt), RMB 7,000/mt ($1,069/mt) and RMB 6,520/mt ($995/mt) respectively. At the same time, CGCC 0.426 mm x 1,000 mm PPGI prices stand at RMB 6,750/mt ($1,031/mt), RMB 7,050/mt ($1,076/mt) and RMB 8,300/mt ($1,267/mt) in the above respective markets. All prices include 17 percent VAT.
During the week under review, most Chinese PPGI producers have issued new price policies, with some of them announcing downward adjustments. This has had a negative impact on confidence levels among traders. With new materials arriving in the market, the domestic PPGI market will continue to face significant inventory pressure. In line with the more or less neutral trend observed in the past two weeks, most traders do not expect any large fluctuations in prices in the short term. However, some are still pessimistic as regards the coming period.
On the macroeconomic side, as per the data released by the Price Monitor Center of China's National Development and Reform Commission (NDRC), in March the consumer price index (CPI) is expected to rise by approximately 5.3-5.6 percent year on year. If such an increase is seen, the central government will probably raise interest rates in April. Increases in interest rates would be expected to slow the capital flow in Chinese industry. Some insiders say that downstream demand in the HDG market will likely not be released to any great extent in the next half of the current year. As a result, it is thought that no fundamental improvement will be seen in the market in the near term.
On the whole, prices in the Chinese domestic PPGI market are expected to trend sideways in the coming week.