Ex-China hot dip galvanized (HDG) offer prices have continued their downward trend over the past week amid poor demand in both local and export markets even though HRC futures prices have increased, which usually signals a better outlook.
Offers from large mills are at $740-750/mt FOB for late September shipment this week, decreasing by $30/mt compared to July 21 on average. Reference deal prices of ex-China HDG have been heard at $730/mt FOB, down from $740-760/mt FOB last week, with some small deals done at this new level.
“Poor demand and cautious sentiments in the export market have exerted a negative impact on ex-China HDG offers,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have indicated rises amid increasing HRC futures prices. Traders have been seeking to push up HDG prices. However, downstream users have mostly held a wait-and-see stance towards purchases amid the severe fluctuations in the spot market. 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 gained RMB 16/mt ($2.4/mt) compared to July 21, standing at RMB 4,786/mt ($710/mt) ex-warehouse, according to SteelOrbis’ information.
As of July 28, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,019/mt (596/mt), rising by RMB 209/mt ($31/mt) or 5.5 percent since July 21.
$1 = RMB 6.7411
