During the week ending July 31, average prices of pre-painted galvanized iron (PPGI) in the Chinese domestic market have declined slightly compared to July 24 amid the decreasing HRC futures prices and slack demand from downstream users, while transaction activity in the domestic market has been at low-to-medium levels.
Ex-China PPGI offers have been heard between $595-605/mt, up $5/mt on average compared to that recorded on July 24. However, since demand has been sluggish, and bearish sentiment prevailed among market players, and futures prices have declined, the ex-China PPGI offer prices might edge down again in the near future.
Average PPGI prices in the local Chinese market are presented in the following table.
| Specification (mm) | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) |
Weekly change ($/mt) |
| 0.476 x 1,000 | CGCC | 4,730 | -10 | 697 | -1 |
| 0.426 x 1,000 | CGCC | 4,890 | -10 | 720 | -1 |
13 percent VAT is included in all prices and all prices are ex-warehouse.
During the given week, inventories of PPGI have indicated slight increases amid the relatively low transaction activities. HRC futures prices have moved on a downtrend, exerting a negative impact on PPGI market. Demand for PPGI has been sluggish, as well as the extreme high temperatures in summer, resulting in the prevailing bearish sentiments. However, PPGI producers have shown no clear intention to curb their production outputs, and their capacity utilization rates indicated slight rises, signaling the market supply will be sufficient in the near future. It is expected that PPGI prices in the Chinese domestic market will edge down further in the coming week.
As of July 31, HRC futures at Shanghai Futures Exchange are standing at RMB 3,220/mt ($489/mt), decreasing by RMB 79/mt ($11.6/mt) or 2.4 percent since July 24, while decreasing by 1.14 percent compared to the previous trading day, July 30.
$1 = RMB 6.7894
