Following a slight increase in ex-China hot dip galvanized (HDG) prices last week, this week most offers have moved sideways, though sentiments have been more positive than negative amid the recovery of HRC futures prices.
Specifically, offers from large mills are heard at around $580-585/mt FOB for August shipment, remaining stable since July 3, though offer prices from smaller mills are heard at $570-575/mt FOB, moving sideways compared to July 3.
As a result, the SteelOrbis reference price for ex-China Z120 HDG has settled at $570-585/mt FOB, the same as last week.
During the given week, HDG prices in the Chinese domestic market have moved up amid increasing HRC futures prices. Since the relevant government departments in China have announced their intention to eliminate outdated capacity, aiming to avoid excessive competition, market sentiments have improved, exerting a positive impact on HDG prices. On July 10, major Chinese steelmaker Baowu Group hiked its HDG ex-works prices for delivery in August by RMB 100/mt ($14/mt), positively affecting market prices. Meanwhile, there have been rumours in the market about more production cuts in China, which will provide support for the HDG market. Though the hot temperatures in the traditional off-season will slacken the demand for HDG, it is thought that HDG prices in the Chinese domestic market will continue their uptrend in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have edged up by RMB 24/mt ($3.4/mt) compared to July 3, standing at RMB 3,867/mt ($541/mt) ex-warehouse, according to SteelOrbis’ information.
As of July 10, HRC futures at Shanghai Futures Exchange are standing at RMB 3,262/mt ($456/mt), moving up by RMB 54/mt ($7.6/mt) or 1.7 percent since July 3, while up 2.16 percent compared to the previous trading day, July 9.
$1 = RMB 7.151
