China's domestic HDG prices have moved on a fluctuating trend this week. For example, the price of SGCC 1.0 mm x 1,250 mm x C material produced by local steelmaker Angang firstly jumped to RMB 4,030/mt, up from RMB 3,980/mt on Thursday last week, before declining back down to RMB 4,000/mt.
Following the upward price trends of other steel products such as rebar, HR and CR, HDG prices went up early this week. However, the number of concluded deals shrank as prices went up, and so prices started to decline again. Because inventories are still at high levels, purchasers maintained a wait-and-see attitude to the latest price rise. Integrated mills are producing at almost normal levels despite the low prices. As a result, the spot market can expect to see continous arrivals of new supplies in the near future. According to the data for March, China's production of galvanized coils, strips and plates came to 1,326,500 mt, i.e. 14.52 percent higher than for February. Traders are generally of the view that another price rise is unlikely, and so most of them continue to sell their products and to prepare for a further decrease. As for demand, with the weather getting warmer, demand is improving as well. According to the Q1 data, investment in real estate has registered a 4.1 percent rise. Thus we can see that demand is getting better, although slowly.
As for the domestic mills, Bensteel this week issued its galvanized coil ex-works prices for May, making no change from the April level. Thus, the producer's price for 1.0 mm SGCC material still stands at RMB 37,500/mt ($549/mt), excluding VAT. The mills are also seen to be maintaining a wait-and-see stance.
Based on the situation observed this week, there is still no great cause for optimism with regard to China's domestic HDG market despite the price rise observed and the improvement in demand. Over the coming period due to the high inventories prices are expected to continue to decline or to basically fluctuate at the current price level.