Ex-China hot dip galvanized (HDG) offer prices have edged up slightly amid limited allocations and rises in mills’ offer prices announced in the local market, though the overall fundamentals have not changed much over the past week.
Offers from Chinese mills this week are at $740/mt FOB for late March shipment for Z120 coils, edging up by $5/mt compared to December 29 on average. Reference deal prices for ex-China HDG have reached $720-730/mt FOB, while last week buyers were saying that the tradable level was $700/mt FOB and mills were ready to accept $720/mt FOB.
“The slack demand has weakened the support for local HDG prices, while high iron ore prices have positively affected HDG prices,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have declined slightly while market players have held various attitudes towards the future prospects for the HDG market. As the Chinese New Year holiday (January 21-27) is approaching, downstream users will gradually be leave for the holiday, which will slacken the demand for HDG. However, major Chinese steelmaker Baosteel has kept its HDG prices stable for delivery in February, while Shougang has raised its HDG prices by RMB 50/mt ($7.3/mt) for the given month, bolstering HDG prices in the spot market. At the same time, the supply shortage of HDG has provided support for prices. It is expected that HDG prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 33/mt ($4.8/mt) compared to December 29 to RMB 4,833/mt ($701.5/mt) ex-warehouse, according to SteelOrbis’ information.
As of January 5, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,073/mt (591/mt), decreasing by RMB 17/mt ($2.5/mt) or 0.42 percent since December 29.
$1 = RMB 6.8926
