Ex-China hot dip galvanized (HDG) offer prices have edged up in the past week, following a rising trend in the previous week. Offers are at $560-570/mt FOB for late September delivery this week, increasing by $2.5/mt on average compared to one week ago amid the increasing trend in local HDG prices, prevailing bullish sentiments and rising iron ore prices. A $580/mt FOB level has also been heard from a few steelmakers, who have been unwilling to do export business.
At the same time, deal prices have been heard at $555-565/mt FOB to South America and Southeast Asia, up $5/mt on average from the previous week.
“The firm trend of local HDG prices has made steelmakers inactive in the export business, and it will be unlikely for them to cut export prices in the short term,” one trader said.
During the given week, some specifications of HDG have been in short supply, and so traders have been ready to push up their offer prices. Meanwhile, rising cold rolled coil prices have also exerted a positive impact on HDG prices. At the same time, inventory of HDG has been relatively low, providing support for prices. Moreover, major Chinese steelmaker Baosteel has raised its local base prices for HDG by RMB 100/mt ($14/mt) for delivery in August, also positively affecting sentiment in the HDG market. It is thought that HDG prices in the Chinese domestic market will move sideways in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have edged up by RMB 50/mt ($7/mt) week on week to RMB 4,606/mt ($658/mt) ex-warehouse, according to SteelOrbis’ information.
As of July 16, HRC futures prices at the Shanghai Futures Exchange are standing at RMB 3,735/mt ($533.6/mt), increasing by RMB 17/mt ($2.4/mt) or 0.45 percent since July 9.
$1 = RMB 6.9913
