Ex-China hot dip galvanized (HDG) offer prices from mills have remained relatively stable this week. However, given some rebound in HRC futures prices, market insiders have reported a slight increase in tradable ex-China HDG offers.
Offers from mills this week are at $730-750/mt FOB for late July shipment, moving sideways compared to May 11 on average. At the same time, reference deal prices for ex-China HDG have been heard at around $700-710/mt, FOB, compared to offers at $695-705/mt FOB last week.
“Recently, iron ore prices have moved on a rising trend, bolstering HDG prices from the cost side, while market players expect further stimulus policies to boost economic development as the real estate and infrastructure industries did not perform well enough in the first four months, which will provide support for the HDG market,” an international trader said.
During the given week, HRC futures prices have moved up, exerting a positive impact on the HDG market. However, major Chinese steelmaker Shougang has cut its HDG prices by RMB 200/mt ($28.6/mt) for June delivery, negatively affecting market sentiments. Market participants have mostly held a wait-and-see stance as regards the future prospects for the HDG market.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have gained RMB 33/mt ($4.7/mt) compared to May 11, standing at RMB 4,650/mt ($665/mt) ex-warehouse, according to SteelOrbis’ information.
As of May 18, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,761/mt (538/mt), rising by RMB 108/mt ($15.5/mt) or 3.0 percent since May 11.
$1 = RMB 6.9967