Ex-China hot dip galvanized (HDG) prices have moved up further over the past week amid expected production cuts ahead of the military parade on September 3 and increasing raw material prices in the local market, while major Chinese mills have also announced a sharp rise in local base prices for September. Nevertheless, exports have been almost silent the market fundamentals still weak, as proved by rising inventories.
Specifically, offers from large Chinese mills have been heard at around $615-630/mt FOB for September shipment, compared to $600-620/mt FOB as of August 7, while offer prices from smaller mills have been heard at $605-615/mt FOB, moving up by $10-15/mt over the past week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $605-630/mt, versus $590-620/mt FOB last week.
During the given week, several Chinese steelmakers, including Baosteel, Anshan Iron and Steel, Bengang and Ansteel Group Lingyuan Steel, have raised their offer prices for HDG by RMB 300/mt ($42/mt) for delivery in September, bolstering market sentiments firmly. Meanwhile, HRC futures prices have seen slight rises, exerting a positive impact on HDG prices. HDG producers have been more willing to produce, resulting in increasing inventories, which may negatively affect market sentiments. It is thought that HDG prices in the Chinese domestic market will likely move sideways in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have decreased by RMB 36/mt ($5.1/mt) compared to August 7, standing at RMB 3,877/mt ($543.5/mt) ex-warehouse, according to SteelOrbis’ information.
As of August 14, HRC futures at Shanghai Futures Exchange are standing at RMB 3,432/mt ($481/mt), increasing by RMB 8/mt ($1.1/mt) or 0.2 percent since August 7, while down 1.18 percent compared to the previous trading day, August 13.
$1 = RMB 7.1337