During the week ending July 18, Chinese domestic hot dip galvanized (HDG) prices have been moving in an upward direction. Average HDG prices in the local Chinese market can be viewed in the SteelOrbis price reports section.
Driven by increases in production costs and higher offers from leading domestic steel producers, Chinese HDG traders have tentatively hiked their local market spot prices in the past week. On the whole, prices have generally been trending up in the Chinese HDG market.
Nevertheless, there are also some unfavorable factors in the market, which cause traders to be wary as regards purchases. Due to the ongoing hot weather in China, demand from downstream industries has not substantially improved. In addition, rumors are circulating that in August the central government will implement restriction measures relating to vehicle purchases, which would negatively affect vehicle sales in the second half of 2013, resulting in a significant shrinkage in HDG consumption by China's automotive sector. Furthermore, with not much overhaul work being carried out by local HDG plants, output of HDG in China has remained at high levels. The high inventories of domestic steel producers and their varied pricing policies depending on orders have posed a threat to prices.
In the coming period, Chinese domestic HDG prices are expected to continue to rise, though at a slower pace.