Ex-China hot dip galvanized (HDG) offer prices have moved on a downward trend over the past week amid the sharp fall seen in the local market. Even though futures prices for HRC have rebounded this week, market sources believe that local and export HDG prices still have room to go down, taking into account the weakness of demand.
Offers from Chinese mills are at $770-780/mt FOB for late September shipment this week, decreasing by $32.5/mt compared to July 14 on average. Reference deal prices of ex-China HDG have been heard at $750-760/mt, FOB, down $30-40/mt compared to last week. Though some sources believe that smaller mills and traders have started to test the market with $740/mt FOB or even lower.
“The sharp decreases in local HDG prices and cautious sentiments have negatively affected ex-China HDG offers,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have seen sharp declines amid the prevailing bearish sentiments among market players. Currently, the demand for HDG has remained slack, which has exerted a negative impact on prices. Some market participants have been willing to cut their sales prices to improve transaction activities. It is thought that HDG prices in the Chinese domestic market will likely edge down in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have declined by RMB 606/mt ($90/mt) compared to July 14 to RMB 4,770/mt ($706/mt) ex-warehouse, according to SteelOrbis’ information.
As of July 21, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,810/mt (564/mt), rising by RMB 18/mt ($3/mt) or 0.5 percent since July 14.
$1 = RMB 6.762