Ex-China hot dip galvanized (HDG) offer prices have moved down amid the decreasing trends seen in HRC futures prices and local HDG prices, while demand has been slow. Though cautious optimism prevails for September, it depends entirely on an increase in consumption.
Offers from China mills this week are at $740/mt FOB for late November shipment, moving down by $15/mt compared to August 25 on average. Reference deal prices for ex-China HDG have been heard at $720-730/mt FOB versus $740/mt FOB last week. And customers have been asking for even lower levels, at $710/mt FOB or below.
“The downtrend in HRC futures prices has negatively affected ex-China HDG offer prices, while market players think that demand may improve in the near future,” an international trader said.
During the given week, local HDG prices have moved down amid decreasing HRC futures prices and the prevailing bearish sentiments among market players. Meanwhile, supplies of HDG have been sufficient, exerting a negative impact on HDG prices. Since the traditional peak season is beginning, demand for HDG may improve to some extent. It is thought 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 decreased by RMB 80/mt ($11.6/mt) compared to August 25 to RMB 4,776/mt ($694/mt) ex-warehouse, according to SteelOrbis’ information.
As of September 1, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,727/mt (541.6/mt), decreasing by RMB 273/mt ($40/mt) or 6.825 percent since August 25.
$1 = RMB 6.8821
