Ex-China hot dip galvanized (HDG) prices have seen slight rises this week amid increasing production costs.
Specifically, offers from large mills are still heard at around $665-675/mt FOB for May shipment, edging up by $5/mt compared to April 18. Meanwhile, the reference deal prices for ex-China Z120 HDG have been heard at around $660/mt FOB, up $5/mt on average compared to last week.
During the given week, HDG prices in the Chinese domestic market have seen slight declines amid the prevailing cautious sentiments among market players. Market players expect to see stock replenishment ahead of the Labor Day holiday (May 1-5), which will bolster HDG prices in the near future. Some market players think the current relatively high inventory levels may exert a negative impact on HDG prices.
Lately, import iron ore prices have risen strongly, bolstering production costs for HDG. However, demand for HDG may slacken in the near future as the traditional offseason approaches. Bond funds have been put into projects, which will accelerate construction activities and positively affect the demand for steel. It is thought that HDG prices in the Chinese domestic market will likely move sideways or edge up in the coming week.
Average 1.0 mm SGCC hot dip galvanized spot prices in China have lost RMB 13/mt ($1.8/mt) compared to April 18, standing at RMB 4,687/mt ($660/mt) ex-warehouse, according to SteelOrbis’ information.
As of April 25, HRC futures at Shanghai Futures Exchange are standing at RMB 3,827/mt ($539/mt), decreasing by RMB 19/mt ($2.7/mt) or 0.5 percent since April 18, while up 0.08 percent compared to the previous trading day, April 24.
$1 = RMB 7.1058