Ex-China hot dip galvanized (HDG) offer prices have moved only slightly up after the holiday with local demand and prices lagging behind expectations.
Offers from mills this week are at $790/mt FOB for late April shipment, edging up by $10/mt compared to January 19 on average. Reference deal prices for ex-China HDG have been heard at $780/mt, FOB, also up by $10/mt compared to the pre-holiday period.
“The downtrend in HRC futures prices has exerted a negative impact on HDG prices,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have moved sideways amid two opposing factors - the optimistic view of the prospects for the future HDG market and the ongoing declining trend of HRC futures prices. Some downstream users have not resumed work as many workers may only come back next week after the Lantern Festival (February 5), and this has exerted a negative impact on the HDG market. At the same time, supply of HDG has been sufficient due to the accumulation of inventory during the long holiday, though inventories are at relatively reasonable levels compared to previous years. As for the coming period, market players are confident. It is expected that HDG prices in the Chinese domestic market may edge up in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have moved sideways compared to January 19, standing at RMB 4,856/mt ($723/mt) ex-warehouse, according to SteelOrbis’ information.
As of February 2, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,057/mt (604/mt), decreasing by RMB 167/mt ($25/mt) or 3.95 percent since January 19.
$1 = RMB 6.713