Following continuous declines in hot rolled coil (HRC) and cold rolled coil (CRC) prices coupled with further drops in HRC futures prices in China, Chinese suppliers of hot dip galvanized coils (HDG) have decreased their offer prices this week.
Specifically, offers from large Chinese mills have been heard at around $590-610/mt FOB for December shipment, compared to $590-620/mt FOB last week, while offer prices from smaller mills have been heard at $585-595/mt FOB, down $5/mt on average week on week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $585-610/mt, versus $590-620/mt FOB last week.
During the given week, HDG prices in the Chinese domestic market have edged up slightly as raw material prices have increased, which has bolstered HDG prices from the cost side. However, demand for HDG in October, another month of the traditional peak season for business, has not seen significant improvement, weakening the support for prices. Moreover, inventories of HDG have been at relatively high levels, negatively affecting market sentiments. Meanwhile, the press release for the 4th Plenary Session of the 20th CPC Central Committee is going to be held at ten o’clock local time on October 24, with market players expecting certain stimulus policies to boost demand for steel, which will exert a positive impact on the HDG market.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 10/mt ($1.4/mt) compared to October 16, standing at RMB 3,873/mt ($545.5/mt) ex-warehouse, according to SteelOrbis’ information.
As of October 23, HRC futures at Shanghai Futures Exchange are standing at RMB 3,256/mt ($459/mt), increasing by RMB 37/mt ($5.2/mt) or 1.1 percent since October 16, while up 0.65 percent compared to the previous trading day, October 22.
$1 = RMB 7.0918
