Ex-China hot dip galvanized (HDG) offer prices have remained mainly unchanged over the past week given the slight recovery in futures prices for HDG this week. However, the situation in the local HDG market has remined quite pessimistic due to the further drops in raw material prices and the lack of demand.
Offers from mills this week are at $800/mt FOB for late June shipment, moving sideways compared to April 13 on average. Reference deal prices for ex-China HDG have been heard at $790/mt, FOB, remaining stable compared to last week.
“The decreasing trend of HRC and iron ore futures prices has negatively affected the HDG market, while demand may be unlikely to improve when approaching the holiday, and so HDG prices may fluctuate within a limited range,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have moved on a downward trend amid decreasing iron ore prices. The declines in raw material prices have weakened the support for HDG prices, while demand has not been as good as market players had expected. A wait-and-see stance has prevailed among downstream users and traders. Moreover, since the Labor Day holiday (April 29-May 3) is approaching, demand for HDG may slacken.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 56/mt ($8.1/mt) compared to April 13, standing at RMB 4,757/mt ($689/mt) ex-warehouse, according to SteelOrbis’ information.
As of April 20, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,973/mt (576/mt), rising by RMB 16/mt ($2.3/mt) or 0.4 percent since April 13.
$1 = RMB 6.8987
