Ex-China hot dip galvanized (HDG) offer prices have moved sideways in the past week amid some weakness seen in the local market, but the outlook is still positive as improvements in demand are expected to push prices up again.
The rare offers from Chinese mills are at $950-970/mt FOB for late June shipment this week, moving sideways on average, while most steelmakers are still not giving export offer prices.
“Rumors have indicated that the new tax rebate policy may become clear as of May, while buyers in the export market have accepted the reality of tax rebate cut and have been willing to buy. Ex-China HDG prices may gain support and edge up further amid the steady demand in the local market and replenishments by overseas buyers,” an international trader said.
During the given week, HRC futures prices have moved on a downward trend, exerting a negative impact on HDG prices. Downstream users have mostly purchased in line with their needs, while they have been unwilling to build up high levels of inventory at the current high prices. Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 17/mt ($2.6/mt) week on week to RMB 6,376/mt ($976/mt) ex-warehouse, according to SteelOrbis’ information.
As of April 15, HRC futures prices at the Shanghai Futures Exchange are standing at RMB 5,393/mt ($826/mt), decreasing by RMB 97/mt ($14.9/mt) or 1.77 percent since April 8, while the decline was also linked to the change to the most popular months for shipment from May to October.
$1 = RMB 6.5297
