Sideways trend in Chinese PPGI market amid slow activity

The Chinese pre-painted galvanized iron (PPGI) market has remained stable in the past week, with prices unchanged in the main cities. Given the weak trend observed in the overall Chinese domestic steel market, transactions for PPGI are few due to the wait-and-see stance adopted by traders. As of October 9, the average sales prices of PPGI in the main Chinese cities are as follows:

At present, CGCC 0.476 mm x 1,000 mm PPGI is sold in the Shanghai, Guangzhou and Boxing markets at RMB 6,500/mt ($1,020/mt), RMB 6,900/mt ($1,083/mt) and RMB 6,520/mt ($1,024/mt) respectively. At the same time, CGCC 0.426 mm x 1,000 mm PPGI prices stand at RMB 6,600/mt ($1,036/mt), RMB 7,000/mt ($1,099/mt) and RMB 8,100/mt ($1,272/mt) in the above respective markets. All prices include 17 percent VAT ($1 = RMB 6.37).

With the tightness of funds after the National Day holiday in early October (Oct. 1-7) and increased expectations for an appreciation of the RMB, the post-holiday PPGI market has seen very slow activity and traders have preferred to monitor the market trend. However, stocks in the main PPGI market are at low levels currently, and this provides support for the stability of PPGI prices.

Meanwhile, some PPGI producers have issued their price policies for October. Accordingly, the new price of 0.476 mm x 1,000 mm PPGI from Bazhou Jinghua Metal Products Co. is RMB 6,350/mt ($996/mt), decreasing by RMB 50-80/mt ($7-12/mt) from the September level. Some mills report that due to the negative effect of the appreciation of the RMB exports have recently been on the low side. In addition, with activity in the domestic market being relatively slow, traders are under pressure to cut their prices to get orders.

Overall, it is expected that the Chinese PPGI market will maintain a stable trend in the coming week.