Ex-China hot dip galvanized (HDG) offer prices have moved down sharply this week in tandem with lower trade activity and significant declines in local and futures prices.
Offers from mills this week are at $750/mt FOB for late June shipment, moving down by $50/mt compared to April 20 on average. Reference deal prices for ex-China HDG have been heard at $740/mt FOB, also decreasing by $50/mt compared to last week.
“The declining HRC futures prices have exerted a negative impact on HDG prices, while the approaching holiday will also weaken the demand for HDG, though the anticipated production reduction may bolster HDG prices in May,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have seen declines amid the prevailing bearish sentiments among market players. Meanwhile, since the Labor Day holiday (April 29-May 3) is approaching, demand for HDG is unlikely to improve, exerting a negative impact on HDG prices. It is thought that HDG prices in the Chinese domestic market will fluctuate within a limited range in the coming week, though they are expected to indicate a rebounding trend in May as producers have planned to reduce outputs.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 103/mt ($15/mt) compared to April 20, standing at RMB 4,653/mt ($672/mt) ex-warehouse, according to SteelOrbis’ information.
As of April 27, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,740/mt (540.5/mt), decreasing by RMB 233/mt ($33.7/mt) or 5.9 percent since April 20.
$1 = RMB 6.9207
