China's domestic HDG prices almost remained stable 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 is still at RMB 4,000/mt, the same level as Thursday last week.
This week China's domestic HR, CR, rebar and wire rod prices increased again following the fluctuating movements seen last week. As for HDG, although prices have maintained a temporary stability due to the wait-and-see mood in the market, traders' inventories have actually dropped. As for the transaction situation, some improvement has been seen with the arrival of the warmer weather. In the meantime, some HDG mills have cut back on their production. For example, Ansteel has cut its HDG production by 40 percent. Thus, new arrivals will see an obvious decrease and spot market inventories will fall further. With rising price trends posted by other steel products, HDG prices are most likely to follow their example. As for the export situation, 1.0 mm thick HDG with 100g/m² Zn coating is being offered at $530/mt FOB China Main Port, the same level as last week; however, the price of 0.5 mm thick HDG has increased to $590/mt FOB China Main Port, up $30/mt from last week. Exporters say the rising trend is due to the increased demand from Southeast Asia, the Middle East and Europe.
As for the domestic mills, Baosteel this week issued its galvanized coil ex-works prices for June, making no change from the May levels. Meanwhile, Shougang made a downward adjustment of RMB 150/mt ($23/mt) for its May ex-work prices compared to the April level. Thus, the producer's price for 1.0 mm St01Z material now stands at RMB 4,200/mt ($615/mt), including VAT.
Based on the situation observed this week, after the three-day holiday at the start of May China's domestic HDG prices may post an upward movement under the influence of the increasing trend of other steel products, improved demand and reduced inventories. However, the global environment continues to be poor and so the prevailing mood is still one of caution.