The Chinese HDG market has observed significant destocking activity in the week ending June 10, while prices have continued to move down. With fewer bookings being made by domestic traders, steel producers have come under great pressure. As of June 10, average HDG prices in the main Chinese cities are as follows:
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
Thick HDG |
1.0 mm x 1,250 mm |
SGCC |
5,163 |
-77 |
757 |
-11 |
Thin HDG |
0.5 mm x 1,000 mm |
SGCC |
5,333 |
-127 |
782 |
-19 |
During the week in question, the decreasing trend of HDG prices in the local Chinese market has slowed down slightly, mainly because the futures markets indicated a relatively flat trend. As traders have decided to delay their purchases from the steel mills, some specifications are now in short supply in the market. In the Boxing market, customers have reported difficulty in obtaining Hetong Steel's HDG products, especially 1.0 mm x 1,000 mm x C specification. In the context of decreasing HDG prices and weak trading activity in the domestic market, sales prices of full hard coils have registered large decreases. It is heard that mills are now inclined to produce HDG products from lower-cost full hard coils.
On Friday, June 4, major Chinese steelmaker Baosteel issued its new price policy for July shipment, reducing its cold rolled coil prices by RMB 500/mt ($73/mt), its HDG prices by RMB 300/mt ($44/mt) and PPGI prices by RMB 200/mt ($29/mt). Other local mills are expected to follow suit with downward adjustments in the coming period.
On the export side, the volume of exports has declined obviously in the past week. As a result, mills will come under increasing pressure from inventories in the coming period.