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September 08, 2008


Chinese HDG prices continue to weaken

Chinese hot dipped galvanized coil prices have been weakening over the past three weeks and the downward pace seems to be accelerating. Market transactions are reported to quite slow and there is evident oversupply at moment

On shanghai market, 1mm HDG by Anshan Steel is being quoted at CNY 5030 to CNY 5040 per tonnes, down by CNY 20 per tonnes from last trading day. 0.5mm HDG by private producers just remain unchanged at CNY 5500 per tonnes. In Shandong's Boxing market, 0.4 HDG prices see a decrease of CNY 30 per tonnes; 0.5mm and 1mm a dive of CNY 70 per tonnes. While Beijing also witnesses a fall of CNY 30 per tonnes for 1mm HDG.

As forecast in previous daily reports, 1.0mm HDG prices are anticipated to soften again following the peak in September if it could not exceed CNY 5200 per tones in Shanghai market. Now it proves to be true since 1mm HDG price in Shanghai has fallen to CNY 5030 per tonnes from high point of CNY 5100 per tonnes in September. If price could not keep above CNY 5000 per tonnes, it probably would ease back to CNY 4800 per tonnes in the remaining days of the year.

Export prices are weakening accordingly. Average export price for 1mm HDG has dropped by USD 10 per tonnes to USD 670 per tonnes FOB from early October. A North China based steel maker told Mysteel that it is now exporting 1mm and 0.6mm HDG Z140 at USD 760 per tonnes and USD 840 per tonnes CFR FO Antwerp , equivalent to about USD 670 per tonnes FOB and USD 750 per tonnes FOB respectively, supposing average freight rate to be USD 90 per tonnes from China to Europe.

However, another tier one steel producer in North East China is concluding sales to Spain by itself at EUR 560 per tonnes CFR for 1 Z180 and EUR 586 per tonnes CFR for 0.6mm Z180, equivalent to USD 795 per tonnes CFR and USD 832 per tonnes CFR respectively, which translates to USD 705 per tonnes FOB and USD 740 per tonnes FOB Chinese port.

European market is reported to be still slow and there are no signs of improvement yet therefore Chinese HDG export offers are anticipated to remain weak in Q4.

(Sourced from Mysteel.net)