Ex-China hot dip galvanized (HDG) offer prices have remained stable over the past week at $995-1,025/mt FOB for late August shipment. The tradable price level has also posted only small changes as, though some smaller mills have been able to provide low prices, major exporters have been less aggressive. Overall sentiment is not very promising due to the weak local demand outlook.
Transaction activities have improved and deals have been heard at $940-950/mt FOB to South America, Africa and the Middle East, though traders said these prices could only be given by private HDG producers, and big state-owned HDG producers could only accept $990/mt FOB. Last week, the workable price level for ex-China HDG was at $950-960/mt FOB. “Demand for HDG may slacken in the near future due to the approach of the traditional off-season in the summer,” an international trader said.
During the given week, domestic HDG prices have declined slightly due to slack demand amid the rainy season in eastern China. At the same time, HRC futures prices have edged down, exerting a negative impact on HDG prices in the spot market. Downstream users have mostly held a wait-and-see stance as regards the future prospects for the market, resulting in slight rises in inventory levels. 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 declined by RMB 40/mt ($6.2/mt) week on week to RMB 6,650/mt ($1,034/mt) ex-warehouse, according to SteelOrbis’ information.
As of June 17, HRC futures prices at the Shanghai Futures Exchange are standing at RMB 5,371/mt (835/mt), decreasing by RMB 77/mt ($12/mt) or 1.41 percent since June 10.
$1 = RMB 6.4298
