Ex-China hot dip galvanized (HDG) offer prices have remained mainly stable amid the weak equilibrium between demand and supply. According to sources, some Chinese suppliers have tried to push for higher prices, but, although some revival of trade activity has been seen in the Middle East and South America during the past week, “the demand is still not sufficient to support higher prices”. Besides, freight rates have increased slightly over the past week.
Offers from mills this week are at $705-715/mt FOB for late November shipment, moving sideways on average compared to September 14. Meanwhile, the reference deal prices for ex-China HDG have been heard at $680-705/mt FOB, increasing by $5/mt on the lower end of the range week on week.
“Good expectation as regards the future prospects for the HDG market have bolstered prices, while demand is slack in the current stage, weakening the support for the HDG market,” an international trader said.
During the given week, HRC futures prices have been fluctuating in China, increasing significantly in the first half of the week, but dropping again by Tuesday, September 21, amid the weak demand from downstream users. However, raw material prices have been at relatively high levels, which have bolstered HDG prices from the cost side. At the same time, supply of HDG has been tight, which will provide support for prices. Since the long National Day holiday (September 29-October 6) is approaching, downstream users are expected to build up stocks, which will exert a positive impact on HDG prices.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 4/mt ($0.6/mt) compared to September 14, standing at RMB 4,853/mt ($677/mt) ex-warehouse, according to SteelOrbis’ information.
As of September 21, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,843/mt (538/mt), edging down by RMB 25/mt ($3.5/mt) compared to September 14.
$1 = RMB 7.173