China's domestic HDG prices have continued their rising movement during the past week. For example, the price of SGCC 1.0 mm x 1,250 mm x C material produced by local steelmaker Angang has increased to RMB 5,050/mt, up from RMB 4,850/mt last Thursday.
After Baosteel raised its HDG prices considerably last week, this week more leading mills such as Bensteel and Shousteel followed suit. Thus, spot prices for HDG have been pushed up again. However, due to the traditional low season and the relatively high prices, the transaction situation is not good. Furthermore, there are not many new arrivals in the market at the current time. Looking at the present situation, although traders have some concerns about later possible risks, no one is willing to sell goods at lower prices when the market appears so bullish. As a result, the market is characterized by an overall wait-and-see atmosphere. Traders are still expecting higher prices. Although most of them have inventories of March to June arrivals, in light of the positive movement of HDG prices since May, most traders continue to be optimistic.
As for the domestic mills, Bensteel this week issued its HDG ex-works prices for August, raising prices by RMB 430/mt ($62/mt) As a result, the price of 1.0 mm SGCC stands at RMB 4,710/mt ($689/mt), excluding 17 percent VAT. Also, Shousteel this week raised its HDG ex-work prices by RMB 500/mt ($73/mt) for August. As a result, the price of 1.0 mm St01Z stands at RMB 5,450/mt ($797/mt), including 17 percent VAT. In addition, this week Panhua Group upped its HDG ex-works prices by RMB 100/mt ($14/mt) for July replacing its previous ex-work prices issued in early July. As a result, this producer's price of 1.0 mm SGCC stands at RMB 5,100/mt ($746/mt), including 17 percent VAT.
Based on the situation observed this week, China's domestic HDG prices have reached elevated levels and, even though the price trend may be flatter in the next few weeks, profits are still expected to be considerable due to the high prices.