Ex-China HDG offers have moved sideways over the past week amid increasing HRC futures prices, while local HDG prices have indicated slight declines.
Specifically, while offers from large Chinese mills have remained stable at around $570-580/mt FOB for February shipment, moving sideways week on week, offer prices from smaller mills have been heard at $540-565/mt FOB, remaining stable on average week on week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $540-580/mt FOB, versus $540-580/mt FOB last week.
During the given week, major Chinese steelmakers Anshan Iron and Steel and Benxi Iron and Steel (Bengang) have raised their local HDG base prices by RMB 100/mt ($14/mt) for delivery in January, exerting a positive impact on market sentiments. However, the demand for HDG has remained slack during the traditional cold winter offseason, weakening the support for prices. Market players expect stock replenishments by downstream users for winter usage, which might positively affect HDG prices. Currently, some private HDG producers have halted their production lines amid increasing inventories, which will likely ease the supply pressure in the spot market in the near future. It is expected that HDG prices in the Chinese domestic market will fluctuate within a limited range in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 3/mt ($0.4/mt) compared to December 11, standing at RMB 3,870/mt ($548/mt) ex-warehouse, according to SteelOrbis’ information.
As of December 18, HRC futures at Shanghai Futures Exchange are standing at RMB 3,277/mt ($464/mt), increasing by RMB 39/mt ($5.5/mt) or 1.2 percent since December 11, while up 1.05 percent compared to the previous trading day, December 17.
$1 = RMB 7.0583
