China's domestic HDG prices have continued to climb up 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 risen to RMB 4,680/mt, up from RMB 4,600/mt last Thursday.
After almost two months' continuous increase, China's domestic HDG prices have now started to enter a relatively flatter trend, with the increase margin this week smaller compared with the last few weeks. The HDG spot transaction situation is not so good now. However, inventories are at fairly low levels and spot prices still keep climbing up, helped by the optimism among traders With the iron ore contract negotiations unlikely to be concluded by the end of this month, spot prices are expected to be affected positively. In the next two months, the hottest period of the year, demand is traditionally low on account of the rain and high temperatures. As a result, the increase trend of HDG prices is expected to register a slowdown and price movement is likely to be flat.
With regard to the export situation, this week China's HDG export prices were almost flat. Currently, 1.0 mm thick HDG with 100g/m² Zn coating is being offered at $580/mt FOB China main ports, the same level as last week.
As for domestic mills, Bensteel last week issued its ex-works HDG price list for July, raising prices by RMB 380/mt ($55/mt) compared to its previous ex-works price for June. As a result, 1.0 mm SGCC stands at RMB 4,280/mt ($626/mt). And also this week, Shousteel raised its HDG ex-works prices for July by RMB 450/mt ($65/mt). Thus, local mills are still obviously eager to increase their prices.
Based on the situation observed this week, the upward movement in China's domestic HDG market may gradually become weaker due to the hotter weather and low demand. However, there is still likely to be a further small upward movement of spot prices next week on the back of the positive expectations of traders.