Ex-China hot dip galvanized (HDG) offer prices have continued their uptrend amid the rise in other flat product prices, in CRC prices in particular. But most market sources agree that prices are too high since the local market in China has posted some declines this week and the outlook for the next week is not so good either.
Offers from some large mills this week are at $740-750/mt FOB for late October shipment, moving up by $10/mt compared to July 27 on average. At the same time, a number of producers are considering prices for Z120 coils at lower levels, at $700-735/mt FOB, versus the tradable levels at $700-725/mt FOB last week. But even at lower levels there has been no deal reported this week. “I believe prices have to go below $700/mt FOB to trigger any negotiations,” a Chinese source said.
“Decreasing HRC futures prices have weakened the support for local HDG prices, while the typhoons have negatively affected market sentiments,” a trader said.
During the given week, HDG prices in the Chinese domestic market have seen slight declines amid decreasing HRC futures prices. At the same time, floods caused by typhoons Doksuri and Khanun hit northern China severely, negatively affecting market sentiments and dragging down HDG prices. Moreover, demand for HDG has slackened, exerting a negative impact on prices in the spot market. It is thought 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 13/mt ($1.8/mt) compared to the previous week to RMB 4,820/mt ($674/mt) ex-warehouse, according to SteelOrbis’ information.
As of August 3, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,984/mt (557/mt), decreasing by RMB 96/mt ($13.4/mt) or 2.35 percent since July 27.