Ex-China HDG offer prices are currently at $590-595/mt FOB, up $7.5/mt week on week on average due to the appreciation of the Chinese currency and the firm trend in the local market amid the issuance of new special local government bonds. Deal can be done at $585-590/mt FOB maximum.
During the given week, inventory of HDG in the Chinese domestic market has risen slightly due to slack demand, while production has also shrunk ahead of the Chinese New Year holiday, providing support for HDG prices. Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 13/mt ($1.9/mt) week on week to RMB 4,730/mt ($680.6/mt) ex-warehouse, according to SteelOrbis’ information.
In January, new special local government bonds will likely exceed RMB 500.0 billion ($72 billion), boosting sentiment and resulting in rises in ferrous metal futures prices and in steel prices in the spot market.
As of January 9, HRC futures at the Shanghai Future Exchange are standing at RMB 3,585/mt ($515.8/mt), increasing by RMB 14/mt ($2.0/mt) or 0.4 percent since January 2.
$1 = RMB 6.95
