Ex-China HDG offers have moved on an uptrend over the past week following increases in HRC futures prices as well as hikes in export prices for HRC and CRC from Chinese mills this week.
Specifically, offers from large Chinese mills stand at $625-630/mt FOB for July shipment, moving up by $5/mt compared to April 30, while offer prices from smaller mills have been heard at $620-625/mt FOB, versus 615-620/mt FOB last week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $620-630/mt FOB, versus $615-625/mt FOB recorded on April 30.
During the given week, HRC futures prices have moved up, positively affecting HDG prices in the spot market. Meanwhile, prices of raw materials, including iron ore and coke, have risen, bolstering HDG prices from the cost side. At the same time, some HDG producers implemented maintenance works during the Labor Day holiday (May 1-5), reducing outputs and providing support for prices in the spot market. However, inventories have increased, which will weaken the support for HDG prices. Moreover, demand for HDG in overseas markets shrank in the first three months this year, similar to the situation in the local market, exerting some negative pressure prices. It is thought that HDG prices in the Chinese domestic market will likely fluctuate within a limited range in the coming period.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 43/mt ($6.3/mt) compared to April 30, standing at RMB 4,123/mt ($602/mt) ex-warehouse, according to SteelOrbis’ information.
As of May 7, HRC futures at Shanghai Futures Exchange are standing at RMB 3,492/mt ($499/mt), increasing by RMB 67/mt ($5.8/mt) or 1.96 percent since April 30, while increasing by 0.55 percent compared to the previous trading day, May 6.
$1 = RMB 6.8487
