Ex-China HDG offers have moved sideways over the past week, though sentiment has become more positive amid higher local HDG prices and the recovery of HRC futures prices.
Specifically, offers from large Chinese mills stand at $615-625/mt FOB for June shipment, moving sideways compared to April 9, while offer prices from smaller mills have remained at $610-615/mt FOB.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $610-625/mt FOB, the same as last week.
During the given period, HDG prices in the Chinese domestic market have edged up slightly amid increasing HRC futures prices. Major Chinese steelmaker Baosteel has announced stable HDG ex-works prices for delivery in May, bolstering market sentiments to a certain degree. Demand for HDG from downstream users in April has not been as good as market players had expected, and so traders have been seeking to sell, even sometimes at lower prices.
On April 16, iron ore futures prices have indicated a strong rise of 3.1 percent, exerting a positive impact on HDG prices from the cost side. However, downstream sectors, including home appliances and construction, have mostly been purchasing in line with needs, which may weaken support for the HDG market. It is thought that HDG prices in the Chinese domestic market will likely move sideways in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 17/mt ($2.5/mt) compared to April 9, standing at RMB 4,043/mt ($589/mt) ex-warehouse, according to SteelOrbis’ information.
As of April 16, HRC futures at Shanghai Futures Exchange are standing at RMB 3,326/mt ($485/mt), increasing by RMB 56/mt ($8.2/mt) or 1.7 percent since April 9, while increasing by 1.22 percent compared to the previous trading day, April 15.
$1 = RMB 6.8616
