Following a sharp fall in ex-China hot dip galvanized (HDG) offer prices last week, this week most Chinese HDG exporters have decided to maintain their prices unchanged. However, most market insiders share the view that the outlook has remained negative given the continuous pressure from falling futures prices.
Offers from mills this week are at $750/mt FOB for late June shipment, moving sideways compared to April 27 on average. Reference deal prices for ex-China HDG have been heard at $740/mt FOB, also remaining stable compared to last week.
“Market players just came back from the Labor Day holiday and chose to hold prices stable at the current stage, though the declining HRC futures prices reflect the prevailing bearish sentiments,” an international trader said.
During the given week, a wait-and-see stance has prevailed among market players due to the Labor Day holiday. Meanwhile, HRC futures prices have moved on a continuous decreasing trend, exerting a negative impact on the spot market. Downstream users have been unwilling to replenish stocks, resulting in quiet transaction activities. Meanwhile, most buyers have preferred to maintain relatively low inventory levels to avoid potential risks. It is thought that HDG prices in the Chinese domestic market may fluctuate within a limited range in the coming week as output reductions may bolster prices in the near future.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 30/mt ($4.3/mt) compared to April 27, standing at RMB 4,623/mt ($669.5/mt) ex-warehouse, according to SteelOrbis’ information.
As of May 4, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,663/mt (530.5/mt), decreasing by RMB 77/mt ($11.2/mt) or 2.1 percent since April 27.
$1 = RMB 6.9054