High HDG ex-factory prices support continued steadiness of market prices

SteelOrbis Shanghai This week, the HDG market price continued to maintain its steady trend. The trading volume did not change much, while market inventory levels saw a slight increase. Also during the week, the Chinese authorities released the December 2006 production data for HDG. In addition, some steel mills released new HDG ex-factory prices. On January 25, 2007, the average market price of 1.0 mm HDG was RMB 5,620/mt ($723/mt), up RMB 10/mt ($1/mt) compared with last week; that of 0.5 mm HDG was unchanged at RMB 6,060/mt ($780/mt); while the average market price of 0.23 mm HDG imported from Indian Bhushan company was RMB 7,280/mt ($937/mt), up RMB 80/mt ($10/mt) on last week. During the past week, the HDG market price continued to remain steady, and while the trading volume was also more or less stable, market inventory levels began to increase little by little. At the end of last year, traders started to focus on recovering their capital and on strengthening their purchases to fulfill the orders of the coming year. As a result, the market prices of HDG fluctuated a little and the attitude of traders also saw a slight change. On the other hand, the new ex-factory prices issued this week for HDG still followed a high trend, thus providing great support for HDG market prices. Thus, for the week ahead the market price of HDG is expected to maintain its stable trend. This week, the domestic zinc price was RMB35000/mt ($4505), unchanged from last week. The Chinese authorities this week released the December 2006 production data for HDG. According to the new figures, the December HDG production of China's steel mills was 1,407,100 tons, up 103,100 tons compared with November. Also this week, the new ex-factory prices of Masteel HDG increased RMB 117-176/mt ($15-23), while those of Panzhihua Steel HDG remained unchanged.