Ex-China HDG offers have remained relatively stable or have been showing a slight downward bias over the past week. Although HRC futures prices are at a higher level compared to last week, since the middle of this week futures prices have started to indicate slight declines, while local HDG prices have also decreased, exerting a negative impact on market sentiments.
Specifically, offers from large Chinese mills have been heard at around $575-590/mt FOB for January shipment, compared to $580-595/mt FOB last week, while offer prices from smaller mills have been heard at $560-575/mt FOB, down by $2.5/mt on average week on week. “Although the export market has remained slow, some big quantities of HRC have been sold to the Middle East, while a few deals for coated steel are also reported to have been signed with additional discounts in South Asia and in the African market,” a market insider told SteelOrbis.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $560-590/mt FOB, down by $5/mt on the higher end of the range week on week.
During the given week, HRC futures prices have indicated increases, positively affecting HDG prices. Demand for HDG has been slack due to the traditional offseason, especially in northern China. Cautious sentiments prevail among market players, which may weaken the support for HDG prices in the near future. However, iron ore prices have risen, bolstering HDG prices from the cost side. It is thought 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 gained RMB 17/mt ($2.4/mt) compared to November 20, standing at RMB 3,877/mt ($546/mt) ex-warehouse, according to SteelOrbis’ information.
As of November 27, HRC futures at Shanghai Futures Exchange are standing at RMB 3,293/mt ($464/mt), increasing by RMB 26/mt ($3.7/mt) or 0.8 percent since November 20, while down 0.27 percent compared to the previous trading day, November 26.
$1 = RMB 7.0779
