Ex-China hot dip galvanized (HDG) offer prices have moved up amid the increasing trend of local HDG and HRC futures prices. Moreover, better sentiments and limitation of supply have supported the uptrend, which has been more rapid in this segment than in some others.
Offers from Chinese mills this week are at $720/mt FOB for late February shipment, moving up by $30/mt compared to December 1 on average. Reference deal prices for ex-China HDG have also increased by $30/mt over the past week to $685-700/mt FOB. Apart from the better supply-demand balance, the recent appreciation of the RMB against the US dollar has added to the strengthening of HDG prices.
During the given week, HDG prices in the Chinese domestic market have risen amid the tight supply in the spot market, and so market players have been willing to raise their offer prices. Meanwhile, firm raw material prices have also provided support for HDG prices. At the same time, some HDG producers in northern China are planning to implement maintenance work, exerting a positive impact on the market. “The tight supply of HDG has bolstered local prices, while demand from downstream users may continue to be slack amid tight liquidity as it is approaching the end of the year,” an international trader said.
It is expected that HDG prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 47/mt ($6.8/mt) compared to December 1 to RMB 4,833/mt ($694.4/mt) ex-warehouse, according to SteelOrbis’ information.
As of December 8, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,945/mt (544/mt), rising by RMB 72/mt ($10.4/mt) or 1.86 percent since December 1.
$1 = RMB 6.9606
