Chinese traders focus on selling off PPGI but demand still limited

In line with the overall slackness in the domestic steel market, the Chinese PPGI market maintained its downward trend in the past week. At present, purchases of PPGI have diminished and market demand is limited, with most traders focusing on selling off their goods. By the end of the week in question, the PPGI market started to indicate some stability, though a strong wait-and-see atmosphere continued to prevail among buyers.

On May 21, CGCC 0.476 mm x 1,000 mm PPGI in the Shanghai, Guangzhou and Boxing markets is priced at RMB 6,650/mt ($975/mt), RMB 7,500/mt ($1,100/mt) and RMB 6,450/mt ($946/mt) respectively. At the same time, CGCC 0.426 mm x 1,000 mm prices stood respectively at RMB 6,600/mt ($968/mt), RMB 7,600/mt ($1,114/mt) and RMB 7,950/mt ($1,083/mt) in these markets.

Over the past week, China's domestic PPGI prices were still characterized by a weak trend, though the decreases in PPGI prices have been smaller than for other steel products. At present, there is plenty of room for a further decline in prices of thin PPGI specifications, due to the significant increase these products registered in the previous period. As regards pre-coated sheet, thin sheet is expected to drop by a maximum of RMB 200/mt ($29/mt), while current prices of thick sheet are close to or even below cost level. Traders think that the recent rebound in products such as cold rolled and hot rolled is cost-based. While no price rebound has yet been seen in the PPGI market, a stable trend is predicted for the coming period.

Traders are focusing on selling off materials, while production operations of some PPGI producers are still shut down given the rather weak levels of business activity. Because of the uncertainties in the market, there is some confusion surrounding quotations of PPGI.

On the steel mill side, Anhui Province-based steelmaker Magang's current PPGI price now stands at RMB 6,914.7/mt ($1,013.89/mt, tax included).