Ex-China hot dip galvanized (HDG) prices from most mills have moved up further this week amid increasing raw material prices coupled with a further rise in HRC futures prices in China.
Specifically, offers from large mills have been heard at around $735-740/mt FOB for January shipment, increasing by $17.5/mt on average compared to November 16. Meanwhile, the reference deal prices for ex-China HDG have been heard at $700-730/mt FOB, up by $20/mt week on week.
During the given week, major Chinese steelmaker Shougang Group raised its local base prices for HDG for delivery in December by RMB 100/mt ($14/mt), positively affecting market sentiments. Meanwhile, raw material prices, including coke prices and import iron ore prices, have moved up, providing solid support for HDG prices from the cost side as well. However, following the continuous rises in import iron ore prices, the relevant government departments in China have urged market participants to be prudent in trading activities, aiming to cool down speculation in the market, which may result in declining iron ore prices and weaken the support for the HDG market. Moreover, the colder weather in China will exert a negative impact on the demand for HDG.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 117/mt ($16.4/mt) compared to November 16, standing at RMB 4,857/mt ($682/mt) ex-warehouse, according to SteelOrbis’ information.
As of November 23, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,014/mt (564/mt), moving down by RMB 34/mt ($4.8/mt) or 0.84 percent compared to November 16.
$1 = RMB 7.1212
