Ex-China HDG offers have edged down slightly over the past week as exporters have been looking for orders and HRC prices are also gradually moving down. Moreover, market sources agree that weak demand in July will push prices down even further, though at a slow pace due to high costs.
Specifically, offers from some large Chinese mills stand at $625-630/mt FOB for August shipment, but some Chinese mills and traders, which had already been offering at much lower levels, have cut their prices again, and the latest tradable level for Z120 1 mm HDG from the most flexible sellers stands at $595/mt FOB, versus $600-605/mt FOB last week. Trading is still limited but some buyers have been in negotiations in Asia at the equivalent to $590-595/mt FOB.
As a result, the SteelOrbis reference price for ex-China Z120 HDG has settled at $595-630/mt FOB, down by $5/mt over the past week.
During the given week, HDG prices in the Chinese domestic market have indicated decreases amid lower HRC futures prices. Transaction activities have been quiet in the HDG market amid the traditional off-season due to continuous rainy weather. Demand for HDG from downstream users has been slack, resulting in slight rises in inventories and negatively affecting prices. Demand for HDG is anticipated to be slacker in July and August. It is expected that HDG prices in the Chinese domestic market will edge down further in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 20/mt ($2.9/mt) compared to June 25, standing at RMB 4,010/mt ($589/mt) ex-warehouse, according to SteelOrbis’ information.
As of July 2, HRC futures at Shanghai Futures Exchange are standing at RMB 3,283/mt ($482/mt), decreasing by RMB 29/mt ($4.3/mt) or 0.9 percent since June 25, while down 0.33 percent compared to the previous trading day, July 1.
$1 = RMB 6.8088
