Offers from Chinese hot dip galvanized (HDG) mills have remained relatively stable this week, but tradable prices have shown a slight downward trend. Sellers have been struggling to attract buyers despite a recovery in domestic HDG prices and an uptick in HRC futures. This disconnection between quoted and achievable levels reflects still-cautious sentiment in the spot market, with buyers resisting higher prices amid uncertain demand outlook.
Specifically, offers from large Chinese mills have been heard at around $590-605/mt FOB for December shipment, while offer prices from smaller mills have been heard at $575-590/mt FOB, down $5-10/mt on average week on week.
As a result, the SteelOrbis reference price for ex-China Z120 HDG stands at $575-605/mt, versus $585-610/mt FOB last week.
During the given week, HDG prices in the Chinese domestic market have increased amid the rising HRC futures prices. Some sellers whose inventories have been at relatively high levels chose to sell at lower prices. Since the new-energy vehicle purchase-tax exemption is going to expire in just two months, many automakers have begun their year-end sales, thereby state-owned steel mills have been receiving sufficient orders for automaking HDG. However, inventories of HDG produced by private steel mills have been at relatively high levels, which will exert a negative impact on its prices.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 27/mt ($3.8/mt) compared to October 23, standing at RMB 3,900/mt ($549/mt) ex-warehouse, according to SteelOrbis’ information.
As of October 31, HRC futures at Shanghai Futures Exchange are standing at RMB 3,308/mt ($467/mt), increasing by RMB 52/mt ($7/mt) since October 23, while down 0.72 percent compared to the previous trading day, October 30.
$1 = RMB 7.0864