Ex-China hot dip galvanized (HDG) offer prices have increased further amid the rising trend of local HDG prices and HRC futures prices. However, the rises have been smaller than in the previous week, when offers had risen by $30/mt, as the major support for the spot market is sentiment rather than an increase in buying activity.
Offers from mills this week are at $730/mt FOB for late February shipment, moving up by $10/mt compared to December 8 on average. Reference deal prices for ex-China HDG have been heard at $690-710/mt FOB, up $5-10/mt compared to last week. Bids from the major customers may be below this level, but mills are not ready to go below $710/mt FOB.
“The decreasing inventory levels of HDG have provided some support for prices, while demand from downstream users will unlikely see an improvement in the near future,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have moved up amid the easing of Covid-19 measures and stimulus policies for the real estate industry, which bolstered market sentiment. Recently, inventory of HDG has declined, also exerting a positive impact on prices. However, the rapid spread of Covid-19 still negatively affects downstream demand. 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 gained RMB 63/mt ($9.1/mt) compared to December 8 to RMB 4,896/mt ($706/mt) ex-warehouse, according to SteelOrbis’ information.
As of December 15, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,149/mt (598/mt), rising by RMB 204/mt ($29.4/mt) or 5.2 percent since December 8.
$1 = RMB 6.9343
