Ex-China HDG offer prices have moved down significantly in the past week as demand from overseas customers has slackened further due to the ongoing spread of the coronavirus worldwide. Offers from mills are at $540-545/mt FOB for late May delivery this week, down by $25/mt compared to a week ago. At the same time, deals have already been heard at $520/mt FOB to Southeast Asia and South Africa.
“Though some steelmakers have shown a willingness to give lower offer prices for ex-China HDG in order to attract buyers, others have suspended giving offer prices as they are worried about possible defaults,” a trader said.
During the given week, demand for HDG has not yet been back to normal levels in the local market due to the slow recovery in downstream industries. Approaching the end of the month, market players have been willing to sell at lower prices to bring in cash and ease the tightness of their funds. Meanwhile, the downtrend in ferrous metal futures prices in China has also negatively affected the HDG market.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have decreased by RMB 47/mt ($6.6/mt) week on week to RMB 4,486/mt ($634.6/mt) ex-warehouse, according to SteelOrbis’ information.
As of March 26, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,294/mt ($466/mt), decreasing by RMB 135/mt ($19.1/mt) or 3.9 percent since March 19.
$1 = RMB 7.0692