Ex-China hot dip galvanized (HDG) offers have moved sideways over the past two weeks with suppliers now returning from the extended Chinese New Year holiday, while no significant changes have been seen in the domestic HDG or HRC futures markets so far.
Specifically, HDG offers from large Chinese mills stand at $580-590/mt FOB for May shipment, remaining unchanged compared to before the Chinese New Year holiday, while offer prices from smaller mills have remained at $565-575/mt FOB.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $565-590/mt FOB, the same as recorded on February 12.
During the given period, HDG prices in the Chinese domestic market have seen slight changes following the long holiday. Inventories of HDG have hit a record new high for the same period over past years. Meanwhile, downstream users, including home appliance producers and automakers have not resumed production completely, resulting in the slow release of demand, which will exert a negative impact on HDG prices. Sellers have been seeking to reduce inventories and bring in cash. However, demand may not resume until after the Lantern Festival, when players will come back to the market. It is expected that HDG prices in the Chinese domestic market will move sideways in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have moved sideways ($2.4/mt) compared to February 12, standing at RMB 3,947/mt ($570/mt) ex-warehouse, according to SteelOrbis’ information.
As of February 26, HRC futures at Shanghai Futures Exchange are standing at RMB 3,218/mt ($463/mt), remaining stable since February 12, while rising by 0.09 percent compared to the previous trading day, February 25.
$1 = RMB 6.9228