Ex-China HDG offer prices skyrocket, buyers not ready

Thursday, 27 July 2023 14:44:58 (GMT+3)   |   Shanghai
       

Ex-China hot dip galvanized (HDG) offer prices have seen big rises over the past week, supported by the uptrend in futures prices and lower allocations.

Offers from mills this week are at $730-740/mt FOB for late September shipment, moving up from $710/mt on average on July 20. Moreover, some offers have surged to as high as $800/mt FOB from mills, which have been showing that they do not need to export now and that allocation is limited. Reference deal prices for ex-China HDG have been heard at $700-725/mt FOB, up $22.5/mt compared to last week.

“Increasing HRC futures prices have bolstered HDG prices, while the prevailing positive sentiments have provided support for the HDG market,” a trader said.

During the given week, HDG prices in the Chinese domestic market have indicated big rises amid increasing HRC futures prices. Meanwhile, steelmakers have been willing to raise their ex-works prices for next month. At the same time, policies for rebuilding villages inside megacities in China have bolstered market sentiments, positively affecting the HDG market. However, typhoon Doksuri is going to hit China in the coming days, which will exert a negative impact on the demand for HDG. 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 gained RMB 170/mt ($23.8/mt) compared to July 20, standing at RMB 4,833/mt ($678/mt) ex-warehouse, according to SteelOrbis’ information.

As of July 27, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,080/mt ($572/mt), increasing by RMB 133/mt ($18.7/mt) or 3.4 percent since July 20.

$1 = RMB 7.1265


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