Ex-China hot dip galvanized (HDG) offer prices have surged further in the past week, following a rising trend in the previous week. Offers are at $735-750/mt FOB for late February shipment this week, edging up by $20/mt on average compared to one week ago amid the sharply increasing local HDG prices, rising HRC futures prices and surging iron ore prices.
Deal prices have been heard at $730-735/mt FOB, mostly to South America and Southeast Asia, edging up by $27.5/mt on average compared to the previous week.
“There have been limited HDG supplies to the export market, resulting in the surging trend of ex-China HDG offer prices. Since no more low-end prices of HDG could be found, deal prices have indicated big rises to $730-735/mt FOB,” an international trader said. He added that market players think that ex-China steel prices will gain solid support amid the expected increases in commodity prices and the appreciation of the Chinese currency, though they also think that the approaching holiday may limit the rising pace of prices.
During the given week, HDG prices in the Chinese domestic market have indicated sharp rises amid surging ferrous metal futures prices and iron ore prices. Meanwhile, major Chinese steelmaker Baosteel has raised its ex-works prices for HDG by RMB 500/mt ($76/mt), exerting a positive impact on the HDG market. At the same time, inventory of HDG is relatively low, which also bolsters prices. It is thought that HDG prices in the Chinese domestic market will likely edge up in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 306/mt ($47/mt) week on week to RMB 5,686/mt ($868/mt) ex-warehouse, according to SteelOrbis’ information.
As of December 10, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,348/mt ($664/mt), increasing by RMB 119/mt ($18.2/mt) or 2.8 percent since December 3.
$1= RMB 6.5476