Although HRC futures prices in China have risen slightly while local HDG prices have also increased, ex-China HDG offers have indicated slight declines on the lower end of the price range over the past week.
Specifically, while offers from large Chinese mills have remained stable at around $575-590/mt FOB for February shipment, offer prices from smaller mills have been heard at $550-575/mt FOB, down by $5/mt on average week on week, with several deals for ex-China Z120 HDG reported to have been signed at $550-560/mt FOB this week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $550-590/mt FOB, versus $560-595/mt FOB last week.
During the given week, HRC futures prices have edged up, exerting a positive impact on HDG prices in the Chinese domestic market. The supply of HDG has been at a relatively high level amid increasing capacity utilization rates, while demand from downstream users has been slack, slowing down inventory consumption. Most traders are cautious as regards the future prospects for the HDG market. Meanwhile, demand for HDG may slacken further in northern China, which will weaken the support for prices.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 13/mt ($1.8/mt) compared to November 27, standing at RMB 3,890/mt ($550/mt) ex-warehouse, according to SteelOrbis’ information.
As of December 4, HRC futures at Shanghai Futures Exchange are standing at RMB 3,332/mt ($471/mt), increasing by RMB 39/mt ($5.5/mt) or 1.2 percent since November 27, while up 0.33 percent compared to the previous trading day, December 3.
$1 = RMB 7.0733