Ex-China hot dip galvanized (HDG) offer prices have moved sideways over the past week. Offers from mills are at $1,015-1,025/mt FOB for late May shipment this week, remaining stable compared to March 17 on average. Nevertheless, the tradable level is $970-980/mt FOB or just slightly above.
“The rebounding trend in HRC future prices has positively affected HDG prices, while the lockdowns and other control measures against the quickly spreading Covid-19 pandemic will weaken the support for HDG demand and will likely drag down HDG prices,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have edged up against a backdrop of limited demand due to the negative impact of the Covid-19 pandemic in many regions of China. Some HDG producers may halt production due to the shortage of raw materials. The transportation of raw materials will be negatively affected in the future, which will bolster prices. It is expected that HDG prices in the Chinese domestic market will move sideways in the coming week.
As of March 24, HRC futures prices at the Shanghai Future Exchange are standing at RMB 5,173/mt (813/mt), rising by RMB 119/mt ($18.7/mt) or 2.35 percent since March 17.
$1 = RMB 6.364