Ex-China hot dip galvanized (HDG) offer prices have moved on a downtrend and have almost hit a two-year low due to the significant depreciation of the local currency, which has allowed mills to offer such low levels overseas. At the same time, though local HDG prices have also declined, the decreases have been much smaller.
Offers from mills this week are at $700/mt FOB for late December shipment, down by $10/mt compared to October 20 on average. At the same time, some mills have already dropped offers below this level and can provide $680-690/mt FOB. The reference deal prices for ex-China Z120 HDG have been heard at $660-680/mt FOB, down by $10-20/mt compared to last week.
“The repeated outbreaks of the Covid-19 pandemic and restriction measures in many regions in China have negatively affected market sentiment and exerted a negative impact on the local HDG market, while weak demand in overseas markets has also weakened the support for ex-China HDG offer prices,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have fluctuated within a limited range as demand from downstream users has not been as good as market players had expected. HRC futures prices have moved on a fluctuating trend at bottom levels over the past week, also affecting HDG prices. Recently, more Covid-19 restriction measures have been seen in many regions. It is expected that HDG prices may decline again in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have decreased by RMB 17/mt ($2.4/mt) compared to October 20 to RMB 4,803/mt ($671/mt) ex-warehouse, according to SteelOrbis’ information.
As of October 27, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,614/mt (505/mt), rising by RMB 2/mt ($0.14/mt) or 0.06 percent since October 20.
$1 = RMB 7.157