Following a slight uptrend seen in ex-China hot dip galvanized (HDG) offer prices last week, this week most offers from Chinese suppliers have remained stable. At the same time, overall sentiment has continued to be rather negative amid still low demand.
Offers from mills this week are at $735/mt FOB for late February shipment, moving sideways compared to December 22 on average. Reference deal prices for ex-China HDG are still heard at $700/mt FOB, remaining stable compared to last week, though some mills are still claiming their offers are not below $720/mt FOB.
“The firm iron ore prices have provided for support HDG prices, while sluggish demand from downstream users has exerted a negative impact on the market,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have fluctuated within a limited range amid the slack demand from downstream users in the traditional offseason. Meanwhile, the mass Covid-19 infections have exerted a negative impact on the HDG market. As the end of the current year is approaching, some downstream enterprises have gradually halted their production, which will slacken demand further. Some traders have been lacking confidence as regards building up stocks for the winter, and have mostly held a wait-and-see stance. However, high iron ore prices have bolstered the HDG market, while the relatively low inventory levels have also 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 23/mt ($3.3/mt) compared to December 22 to RMB 4,863/mt ($697/mt) ex-warehouse, according to SteelOrbis’ information.
As of December 29, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,090/mt (586/mt), increasing by RMB 65/mt ($9.3/mt) or 1.6 percent since December 22.
$1 = RMB 6.9793
