Ex-China hot dip galvanized (HDG) offer prices have moved up further in the past week - following a slight uptrend in the previous week - due to the rising trend in the local market and solid support from raw material prices. Offers are at $535-555/mt FOB for late July delivery this week, moving up by $15/mt compared to one week ago. At the same time, reference deal prices have been heard at above $535/mt FOB to Southeast Asia and South America. In particular, more inquiries from Thailand have been heard at $535/mt FOB and some Chinese sellers have been unwilling to accept this price level.
“The rising trend in ex-China HDG will likely reduce export opportunities, while this upward momentum will continue in the short term amid strong iron ore prices, though we also worry about a possible downward correction following continuous rises in May,” a trader told SteelOrbis.
During the given week, raw material prices have moved up, providing support for HDG prices. Meanwhile, ferrous metal futures prices have moved on an overall upward trend, exerting a positive impact on the HDG market. Moreover, HDG producers have reduced their capacity utilization rates. Currently, inventory levels held by some traders are low and so they are unlikely to cut their prices. It is expected that HDG prices in the Chinese domestic market will stay strong in the near future.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have increased by RMB 70/mt ($9.9/mt) week on week to RMB 4,396/mt ($620.3/mt) ex-warehouse, according to SteelOrbis’ information.
As of May 21, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,469/mt ($489.5/mt), increasing by RMB 164/mt ($23.1/mt) or 5.0 percent since May 14.
$1 = RMB 7.0868
