During the past week China's domestic pre-painted galvanized iron prices continued to jump up. For example, the price of CGCC 0.476 mm x 1,000 mm x C material produced by Wuxi NewDaZhong has increased to RMB 5,250/mt, up from RMB 5,230/mt last Friday.
As Chinese domestic PPGI prices have been increasing continuously for over a month, there is a greater possibility now that they will soon start to enter a relatively stable trend. This week China's domestic HR and CR prices have continued to fluctuate while wire rod and rebar prices have maintained their declining movement. In the domestic PPGI market, the low level of inventories and positive expectations of traders have been the main factors contributing to the price uptrend. Furthermore, the local steel market this week welcomed the news of China's increased export rebate rate for steel products, the second such move this year, which is aimed at improving the dull export market situation. The affected products include HR, HRP and others. Although PPGI still enjoys a 13 percent rebate rate according to the previous adjustment made on April 1 this year, the new rebate adjustment imparts a positive momentum to the overall steel market. Some PPGI exporters have raised their offer prices in line with the domestic price increase. Nevertheless, Chinese exporters are still waiting for further stimulus measures for exports. For the moment, domestic traders are optimistic about the prospects for the future market, and so in the short term the PPGI price uptrend is likely to continue, at least into the coming week.
As for domestic mills, Baosteel this week issued its ex-works prices for July, with its PPGI prices increasing by RMB 450/mt ($65/mt) compared to June. This is an indication that the mills still have confidence in the market.
Based on the situation observed this week, the upward movement in China's domestic PPGI market will likely continue into next week. However, as most other steel products have been showing fluctuating or declining movements, the domestic PPGI market may soon enter a relatively flat trend.