Local Chinese HDG market enters relatively stable trend

Thursday, 02 July 2009 15:55:00 (GMT+3)   |  
       

China's domestic HDG prices have started to move on a relatively stable trend 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 edged up to RMB 4,700/mt, increasing from RMB 4,680/mt last Thursday.

With China's domestic HDG prices having reached a high level due to the continuous increase movement over the past two months, the transaction situation in the market is not so good now. Downstream purchasers are maintaining a wait-and-see stance towards the market, especially as demand is now at low levels due to the hot season. Also, CR prices have declined this week, and this will surely have a knock-on effect on HDG prices. As a result, HDG prices may be about to enter a fluctuating phase, perhaps in the coming week. However, taking a more optimistic view, inventories are currently not high and traders are still positive in their outlook following the continuous increase. Furthermore, it is said that local steel giant Baosteel will again raise its ex-work prices, which would boost confidence levels in the market. Thus, even if a decline is seen in the near term, the decrease margin is not likely to be great.

With regard to the export situation, this week China's HDG export prices increased due to the continuous rise registered by domestic prices. Currently, 1.0 mm thick HDG with 100g/m² Zn coating is being offered at $630/mt FOB China main ports, $50/mt higher than last week.

Based on the situation observed this week, domestic HDG prices have entered a phase of relatively flat movement and the continuous rising trend seems to be coming to an end. With most steel product prices in the domestic market indicating fluctuations at the current time, local HDG prices are likely to follow the same trend and to fluctuate within a relatively small margin.


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