Ex-China HDG offers have remained stable over the past week amid slightly increasing HRC futures prices, while local HDG prices have also indicated slight rises. But market sources are cautious for the near future and some declines are not excluded, considering slow demand in both local and export markets.
Specifically, offers from large Chinese mills have remained stable at around $570-580/mt FOB for February shipment, while offer prices from smaller mills have been heard at $540-565/mt FOB.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $540-580/mt FOB, similar to last week.
During the given week, stock movement of HDG slowed down in the local market in China, negatively affecting its prices. Currently, demand for HDG has been slack, while supply has been relatively sufficient, exerting a negative impact on its prices. Coke prices are expected to see further decreases, which will weaken the support to HDG prices from cost side. Given the persisting supply-demand imbalance, it is thought that HDG prices in the Chinese domestic market will bear downward pressures in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 13/mt ($1.8/mt) compared to December 18, standing at RMB 3,883/mt ($552/mt) ex-warehouse, according to SteelOrbis’ information.
As of December 25, HRC futures at Shanghai Futures Exchange are standing at RMB 3,280/mt ($464/mt), increasing by RMB 3/mt ($0.4/mt) or 0.09 percent since December 18, while up 0.03 percent compared to the previous trading day, December 24.
$1 = RMB 7.0392
