Ex-China hot dip galvanized (HDG) offer prices have moved sideways over the past week. Offers from mills are at $1,020-1,030/mt FOB for late September shipment this week.
“Offer prices have been in chaos due to the cancellation of tax rebate on HDG as of August 1, steelmakers and traders have been unwilling to give offer prices at the current stage,” an international trader said.
The cancelation of 13 percent of export tax rebate of HDG will result in rising expenses for sellers by $120-130/mt so mills are now evaluating the situation, taking into account current profits, situation in the local market and outlook. Overall offers for ex-China HDG have increased by $35/mt on average since early July.
During the given week, domestic HDG prices have seen big rises amid the increasing ferrous metal futures prices. However, demand for HDG has remained slack, resulting in the prevailing wait-and-see stance among downstream users. Inventory of HDG has seen rises, though it has still been at relatively low level. It is expected 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 110/mt ($16.9/mt) week on week to RMB 6,906/mt ($1,063/mt) ex-warehouse, according to SteelOrbis’ information.
As of July 29, HRC futures prices at the Shanghai Future Exchange are standing at RMB 6,104/mt (940/mt), increasing by RMB 157/mt ($24.2/mt) or 2.64 percent since July 22.
$1 = RMB 6.4942
