Ex-China hot dip galvanized (HDG) offer prices have been showing mixed signals this week, as, while on the one hand big steel mills have dropped their prices to attract buyers, and, on the other hand, Chinese suppliers, who were offering the cheapest prices last week, have decided to go slightly higher amid better sentiments given the recovery of HRC futures prices.
More specifically, offers from mills this week have settled at $690/mt FOB for late July shipment, decreasing by $10/mt compared to May 25. Meanwhile, reference tradable prices for ex-China HDG have been heard at $655-675/mt, FOB, versus $650-690/mt FOB last week, as several buyers have decided to increase their offers given the hikes in HRC futures prices, while others dropped their offers to workable levels to boost sales.
“The big increases in iron ore futures prices and HRC futures prices on June 1 have exerted a positive impact on the HDG market, though the expected sluggish demand in the hot summer season may weaken the support for HDG prices,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have decreased amid the slack demand from downstream users and slightly increasing production outputs. However, on June 1, the first trading day of June, iron ore futures prices at Dalian Commodity Exchange (DCE) have indicated a big rise of 5.77 percent, bolstering market sentiment. It is expected that HDG prices in the Chinese domestic market will move sideways in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 57/mt ($8/mt) compared to May 25, standing at RMB 4,550/mt ($641/mt) ex-warehouse, according to SteelOrbis’ information.
As of June 1, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,664/mt (516/mt), increasing by RMB 132/mt ($18.6/mt) or 3.7 percent since May 25.
$1 = RMB 7.0529
