Ex-China HDG offers have moved sideways over the past week, while market sources believe that the stable trend may continue since, even though demand overall has not been decent, unlike in some other segments, there are no big inventories of HDG at mills.
Offers from large Chinese mills have remained stable and unworkable at $595-600/mt FOB for September shipment. Small Chinese mills and traders have been offering at $585-590/mt FOB.
During the given week, HDG prices in the Chinese domestic market have fluctuated within a limited range amid relatively high production capacity utilization rates and decreasing inventories of HDG. In many regions, ultra-high-voltage (UHV) and electricity distribution network renovation projects have entered the peak construction season, contributing to the improvement in demand for HDG and providing support for prices. Recently, coke prices have declined in three separate rounds, exerting a negative impact on HDG prices, while the rumors about possible production restrictions have pushed up coke futures prices since August 5, which will likely bolster HDG prices again from the cost side.
Since the demand from downstream users is unlikely to see significant improvements yet, it is thought that HDG prices in the Chinese domestic market will continue to fluctuate within a limited range in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 7/mt ($1.0/mt) compared to July 30, standing at RMB 4,010/mt ($591/mt) ex-warehouse, according to SteelOrbis' information.
As of August 6, HRC futures at Shanghai Futures Exchange are standing at RMB 3,236/mt ($477/mt), decreasing by RMB 4/mt ($0.6/mt) or 0.1 percent since July 30, while increasing by 1.06 percent compared to the previous trading day, August 5.
$1 = RMB 6.7895
