Although last week some optimism reappeared in the market, this week ex-China hot dip galvanized (HDG) offer prices have edged down slightly amid weaker sentiments in the local market affected by declines in futures prices for HDG and raw materials in China.
Offers from mills this week are at $820/mt FOB for late June shipment, edging down by $10/mt compared to March 30 on average. Reference deal prices for ex-China HDG have been heard at $790-800/mt, FOB, also down by $10/mt on the higher end of the range compared to last week.
“Import iron ore prices have moved down, negatively affecting the HDG market from the cost side, while demand from downstream users has not been at the level that market players had expected,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have decreased amid declining HRC futures prices and slack demand from downstream users. At the same time, import iron ore prices have decreased in the given week, weakening the support for HDG prices from the cost side. Though market players think demand for HDG may improve in April, it has not reached the level they had anticipated. 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 53/mt ($7.7/mt) compared to March 30, standing at RMB 4,877/mt ($710/mt) ex-warehouse, according to SteelOrbis’ information.
As of April 6, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,015/mt (584/mt), decreasing by RMB 259/mt ($37.7/mt) or 6.06 percent since March 30.
$1 = RMB 6.8747
