Ex-China hot dip galvanized (HDG) offer prices have moved up sharply this week amid raw material price rises and as most suppliers have been in a hurry to announce new levels before leaving for the Chinese New Year holiday.
Offers from Chinese mills this week have reached $780/mt FOB for late March shipment, moving up by $40/mt compared to January 5 on average. Reference deal prices for ex-China HDG have been heard at $760-770/mt, FOB, increasing also by $40/mt compared to last week.
“Increases in iron ore prices have bolstered HDG prices, while stock replenishment ahead of the holiday has also positively affected the market,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have moved up amid the rising trend of HRC futures prices. However, downstream users have been gradually leaving the market because of the upcoming Chinese New Year holiday (January 21-27), with a few of them building up stocks, which has provided support for HDG prices. High iron ore prices have bolstered HDG prices from the cost side. It is thought that HDG prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 23/mt ($3.4/mt) compared to January 5 to RMB 4,856/mt ($717.3/mt) ex-warehouse, according to SteelOrbis’ information.
As of January 12, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,182/mt (618/mt), rising by RMB 109/mt ($16.1/mt) or 2.7 percent since January 5.
$1 = RMB 6.768
