Ex-China hot dip galvanized (HDG) offer prices have moved down sharply over the past week, following drops in other flat steel product prices, the local market slump, and overall negative sentiments. Offers from large mills are at $870-880/mt FOB for late August shipment this week, down by $35/mt compared to June 16 on average.
Reference deal prices of ex-China HDG have been heard at $850/mt FOB, down $45/mt compared to last week, though most buyers have been in a waiting mood, wanting to see the bottom first.
“The downtrend in ferrous metal futures prices and the prevailing bearish sentiments have weakened the support for HDG prices, while the bottoming up of HRC futures prices and iron ore prices may bolster the HDG market in the coming period,” an international trader said.
During the given week, HDG prices in the Chinese domestic market have moved down sharply amid the decreasing HRC futures prices and the prevailing bearish sentiments among market players. On June 23, ferrous metal futures prices bottomed up, providing support for HDG prices in the spot market. HDG supplies arriving in the market increased in the given week and the financial tightness approaching the end of the month negatively affected prices. It is thought that HDG prices in the Chinese domestic market will likely edge down further the coming week, but at a much slower pace.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have moved down by RMB 413/mt ($61.5/mt) compared to June 16, standing at RMB 5,640/mt ($840.5/mt) ex-warehouse, according to SteelOrbis’ information.
As of June 23, HRC futures prices at the Shanghai Future Exchange are standing at RMB 4,285/mt (638.6/mt), decreasing by RMB 324/mt ($48.3/mt) or 7.03 percent since June 16. Today's futures close price is RMB 90/mt ($13/mt) higher than a day before.
$1 = RMB 6.7079