Ex-China HDG offers have edged up over the past week amid the slightly rising local HDG prices.
Specifically, offers from large Chinese mills have edged up by $5/mt over the past week to $580-590/mt FOB for February shipment, while offer prices from smaller mills have been heard at $560-575/mt FOB, versus $555-570/mt FOB last week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $560-590/mt FOB, versus $555-585/mt FOB last week.
During the given period, HDG prices in the Chinese domestic market have seen slight rises as the sales of China’s automotive vehicles amounted to 34.40 million units, hitting the record new high, which bolstered the demand for HDG. However, most market participants have been cautious in building up stock ahead of the Chinese New Year holiday, which might exert a negative impact on HDG prices.
Zhou Lan, Deputy Governor and the spokesman of People's Bank of China stated at the State Council Information Office press release on January 15 that interest rates for various structural monetary policy tools will be cut by 0.25 percentage points, with one-year re-lending rates for various categories reduced to 1.25 percent, and interest rates for other maturity brackets adjusted accordingly. PBOC’s move will provide certain support to market sentiments and will positively affect HDG prices.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 7/mt ($1.0/mt) compared to January 8, standing at RMB 3,900/mt ($556/mt) ex-warehouse, according to SteelOrbis’ information.
As of January 15, HRC futures at Shanghai Futures Exchange are standing at RMB 3,307/mt ($472/mt), decreasing by RMB 10/mt ($1.4/mt) or 0.3 percent since January 8, while remaining stable compared to the previous trading day, January 14.
$1 = RMB 7.0064
