Over the past week China's domestic HDG market has been moving on a weak trend. With no further upward adjustment seen in mills' ex-factory prices, some medium and small mills have even lowered their prices against a background of slack commercial activity.
Product name | Specification | Category | Average price (RMB) | Weekly change (RMB) | Price (US$) | Weekly change (US$) |
Thick HDG | 1.0 mm x 1,250 mm | SGCC | 5,140 | -30 | 754 | -4 |
Thin HDG | 0.5 mm x 1,000 mm | SGCC | 5,320 | -57 | 780 | -8 |
Various leading mills in China have in succession issued their HDG ex-factory prices for February. In the past week, WISCO released its latest price policy for February, canceling a discount of RMB 200/mt ($29/mt) for HDG products. On the upstream side, HRC and CRC prices have again registered a decline, while some traders seem willing to cash in their materials. The decrease in flats prices has not only affected the atmosphere in the HDG market but has also lowered the production costs of HDG. On account of the relatively high costs of full hard coils and also given the restrictions on power supply, HDG outputs have not remained at high levels. In this context, there does not seem to be any great room available for downward movement in domestic HDG prices in the short term.
Meanwhile, the domestic HDG market has seen weak levels of commercial activity in recent days. The Lecong market has observed a better trading performance compared with the other markets as it mainly supplies materials directly to the downstream side. In Boxing, the local HDG market has seen increased stocks as a result of the continuing sluggishness of trading.
China's central bank recently raised the interest on three-month bills again by four basis points to 1.4 percent, signaling a tightening of liquidity in the markets in the future. In this connection, the domestic steel market has remained on its sliding trend.
China's HDG output in December 2009 totaled 2.0338 million mt, up 518,100 mt or 34.2 percent year on year. Average daily HDG production in China during the month in question reached 65,600 mt, up by 2,100 mt or 3.27 percent month on month. Meanwhile, domestic HDG production for the whole of 2009 reached 20.138 million mt, up 2.3984 million mt or 13.5 percent year on year.
China's HDG exports in December stood at 399,400 mt, up 216,800 mt or 118.77 percent year on year, totaling $291 million in value, up $109 million or 59.38 percent compared with December 2008. The average export price was $729.66/mt. Total HDG exports in 2009 reached 2.1505 million mt, down 1.5601 mt or 42.05 percent, amounting to $1.693 billion in value, down $2.116 billion or 55.55 percent year on year.
HDG imports in December stood at 373,700 mt, up 148,200 mt or 65.71 percent year on year, totaling $320 million in value, up $72 million or 28.79 percent compared with the same month of the previous year. The average import price was $857.29/mt. Total HDG imports in 2009 reached 3.2849 million mt, down 817,600 mt or 19.93 percent, amounting to a total value of $2.817 billion, down $1.22 billion or 30.22 percent year on year.