Prices have continued to decline in China's domestic HDG market 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 declined to RMB 4,550/mt, down from RMB 4,780/mt on 24, Oct.
Before China's long National Day holiday (October 1-8), local traders were concerned that inventores would accumulate during the holiday period. At that time prices were continuing their downward trend. After the conclusion of the holiday, with Baosteel announcing a sharp reduction of its ex-works prices, other mills followed suit. Upon this negative signal, traders, who had previously been maintaining their wait-and-see policy, began to feel worried and started to decrease their prices. In addition, inventory also began to exert pressure on them. Meanwhile, the domestic transaction situation is not good as downstream users wait for prices to decline further, although there has been an improvement as regards exports. However, all the above has happened in just the first week after the holiday, and the mood of traders is easily influenced by certain factors, such as the price announcement by Baosteel. In the coming weeks, the situation may register a change.
As for the domestic mills, Baosteel this week issued its HDG ex-works prices for November, decreasing prices by RMB 400/mt ($58/mt) compared to its ex-works price for October. As a result, the price of 1.0 mm DC51D+Z stands at RMB 4,977/mt ($729/mt), excluding 17 percent VAT. In addition, WISCO this week decreased its HDG for November for several categories such as WLZn, DX51D, DX52D and DX53D by RMB 500/mt. The prices of other categories from this producer remained stable. Also, Ansteel this week issued its HDG ex-works prices for November, decreasing prices by RMB 300/mt ($43/mt) compared to its ex-works price for October. As a result, its price of 1.0 mm ST01Z stands at RMB 4,050/mt ($593/mt), excluding 17 percent VAT.
Based on the situation observed this week, China's domestic HDG prices are now declining. In the coming week, HDG prices are likely to decline further under the influence of the other main steel products.