China's domestic pre-painted galvanized iron prices posted a small upward movement during the past week. For example, the price of CGCC 0.476 mm x 1,000 mm x C material produced by Wuxi NewDaZhong has increased to RMB 5,900/mt, up from RMB 5,850/mt last Friday.
As spot prices for rebar, wire rod, CR and HDG continue to increase with the steel futures prices also increasing sharply, China's domestic PPGI prices this week registered a small increase following last week's stable movement. Furthermore, it is said that some leading domestic mills such as Baosteel and WISCO intend to raise their ex-work prices for September in the next few weeks. Meanwhile, the prices of raw materials are increasing continuously at the current time, pushing finished steel prices up further. The transaction situation is not good at present in the domestic PPGI market where a wait-and-see atmosphere prevails. At the same time, there is little possibility of a further expansion of demand due to the low season. The current price movement, though up slightly over the past week, is almost flat, and any increase seems destined to be limited. Thinking that a price increase may possibly be seen in early August, some traders are still trying to stock up now and so make a profit later. As a result, some increase is observed in inventories at the current time.
As for the domestic mills, Huangshi Steel located in Hubei Province this week raised its PPGI ex-works prices by RMB 550/mt ($841/mt) for August. However, the impact on the domestic PPGI market has not been great as this mill is not so influential in China.
Based on the situation observed this week, prices in the domestic PPGI market are still likely to continue to rise, though by a limited margin, due to the overall positive market situation, and in the short term this trend is not expected to change. Thus, next week a continuation of the current increasinng movement may be seen.