During the week ending September 25, Chinese domestic hot dip galvanized (HDG) prices have continued their slight downtrend, while transaction activity has remained at low levels. Average HDG prices in the local Chinese market can be viewed in the SteelOrbis price reports section.
During the given week, some Chinese steelmakers have cut their ex-works prices. For example, Tangshan, Hebei province-based Guofeng Iron and Steel's transaction prices for hot rolled coil (HRC) for September delivery have decreased by RMB 320/mt ($52/mt) compared to August delivery transaction prices. With such decreases in upstream costs, other local steelmakers will likely cut their HDG prices in the future, which will negatively impact the spot market. Meanwhile, inventory levels of certain HDG producers are on the high side. However, some of these mills are expected to halt production during China's National Day Holiday (October 1-7) and so supply pressures will be eased. It is thought that HDG prices in the Chinese domestic market will move sideways in the coming week.