Ex-China hot dip galvanized (HDG) export activity has come to a standstill over the past week, and Chinese steelmakers have mainly halted giving offer prices following the cancellation of the export tax rebate as of August 1. The previous offers from mills were at $1,020-1,030/mt FOB for late September shipment, moving sideways week on week on average. But market sources said that after sellers and buyers complete negotiations regarding previously signed contracts, new offers for HDG will be at least $100/mt higher. One source said that a major mill is considering entering the market with a new price level at $1,130/mt FOB.
“No actual deals have been heard following the cancellation of export tax rebate,” an international trader said.
During the given week, domestic HDG prices in China have declined slightly amid decreasing HRC futures prices and bearish sentiment among market players. Demand for HDG has remained slack in the traditional offseason, which will exert a negative impact on the market. It is expected 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 73/mt ($11.3/mt) week on week to RMB 6,833/mt ($1,056/mt) ex-warehouse, according to SteelOrbis’ information.
As of August 5, HRC futures prices at the Shanghai Futures Exchange are standing at RMB 5,733/mt (886.2/mt), decreasing by RMB 371/mt ($57.4/mt) or 6.1 percent since July 29.
$1 = RMB 6.4691
