Ex-China HDG offers continued to decline over the past week. Overall market sentiment has weakened as domestic HDG prices have moved lower and additional pressure has come from further drops in CRC and HRC price levels. Softening HRC futures prices have also contributed to the bearish mood, reinforcing expectations of a limited near-term recovery.
Specifically, offers from large Chinese mills have been heard at around $580-600/mt FOB for January shipment, compared to $590-605/mt FOB last week, while offer prices from smaller mills have been heard at $560-585/mt FOB, down by $10/mt on average week on week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $560-600/mt FOB, versus $575-605/mt FOB last week.
During the given week, sentiments have been negatively affected by the market performance in October, which was not as good as expected. However, the US Federal Reserve reduced interest rates by 25 basis points to 3.75-4.0 percent, exerting a positive impact on commodity prices. HRC futures prices have decreased in the given week, weakening the support for the HDG market. Meanwhile, the relatively sufficient supply of HDG and slack demand from downstream users have resulted in rising inventories, also negatively affecting prices. It is expected that HDG prices in the Chinese domestic market will soften further in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 33/mt ($4.6/mt) compared to October 30, standing at RMB 3,867/mt ($545/mt) ex-warehouse, according to SteelOrbis’ information.
As of November 6, HRC futures at Shanghai Futures Exchange are standing at RMB 3,256/mt ($467/mt), decreasing by RMB 62/mt ($8.7/mt) or 1.9 percent since October 30, while up 0.22 percent compared to the previous trading day, November 5.
$1 = RMB 7.0865
