Ex-China hot dip galvanized (HDG) offer prices have seen a rising trend mainly amid the recovery in raw materials and HRC futures prices in China. Besides, additional support has been provided by higher offers for local HDG in China this week.
At present, offers from mills this week are at $700-710/mt FOB for late July shipment, increasing by $10-20/mt compared to June 1. Meanwhile, reference deal prices for ex-China HDG have been heard at around $665-685/mt, FOB, versus $655-675/mt FOB last week.
“The increasing trends in iron ore prices and ferrous metal futures prices provided support for HDG prices, while the expected shrinking of supply will also positively affect the HDG market, though the rainy season and high temperatures will weaken market sentiments,” an international trader said.
During the given week, HDG prices have seen rises amid increasing ferrous metal futures prices. However, demand for HDG has not indicated significant improvement yet. Production cuts in some regions of China have positively affected market sentiments. At the same time, the decreasing inventory levels have also bolstered the HDG market. Since the traditional offseason is approaching, market players mostly hold a wait-and-see stance as regards the future prospects for the HDG market. It is thought that HDG prices in the Chinese domestic market may fluctuate within a limited range in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 100/mt ($14/mt) compared to June 1, standing at RMB 4,650/mt ($652/mt) ex-warehouse, according to SteelOrbis’ information.
As of June 8, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,750/mt (526/mt), increasing by RMB 86/mt ($12.1/mt) or 2.3 percent since June 1.
$1 = RMB 7.128
