Ex-China hot dip galvanized (HDG) offer prices have moved down amid the downtrend in HRC futures prices. However, most sources believe that a further drop is unlikely as the declines in ferrous metal futures prices have slowed down, while major Chinese steelmaker Baowu Group has raised its HDG prices for September delivery, bolstering market sentiment to some extent.
Offers from mills this week are at $700-710/mt FOB for late October shipment, moving down by $40/mt compared to August 3 on average. Reference deal prices for ex-China HDG have been heard at $690-700/mt, FOB, versus $700-735/mt FOB last week.
“Th downtrend in HRC futures prices has negatively affected the HDG market, while Baowu Group’s prices for September have bolstered sentiments as regards the future prospects for the HDG market,” an international trader said.
During the given week, HRC futures prices have moved down, exerting a negative impact on the HDG market, though the declines in ferrous metal futures prices have slowed down compared to last week. Some traders have adjusted their HDG prices upward, even though transaction activities have been quiet. At the same time, Baowu Group raised its HDG prices for September delivery by RMB 200/mt ($28/mt), providing some support for market sentiments. Furthermore, the demand for HDG is expected to improve in late August, according to sources.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 53/mt ($7.4/mt) compared to August 3, standing at RMB 4,873/mt ($681/mt) ex-warehouse, according to SteelOrbis’ information.
As of August 10, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,921/mt (548/mt), decreasing by RMB 63/mt ($8.8/mt) or 1.6 percent since August 3.
$1 = RMB 7.1576