Low demand leaves HDG market price unchanged

SteelOrbis Shanghai This week, the HDG market price continued to remain unchanged. The trading volume did not see any upturn, while market inventories declined slightly compared with last week. Also this week, some steel mills released their HDG ex-factory price for January 2007. On December 21, the average market price of 1.0 mm HDG was RMB 5,583/mt ($715/mt), down RMB 7/mt ($1/mt) compared with last week; that of 0.5 mm HDG is RMB 5,930/mt ($759/mt), down RMB10/mt ($1/mt) compared with the price last weekend; while the average market price of 0.23 mm HDG imported from Indian Bhushan is unchanged at RMB 7,200/mt ($922/mt). This week, the HDG market price was still unchanged overall, but fluctuated in some markets. The trading volume was at a low level and the market inventories decreased a little. As regards the general market situation, because Chinese HDG is mainly used in the building industry, the drop in HDG demand during the winter construction off-season has influenced the HDG market price greatly. Though the CR market price saw a strong increase recently, the HDG market price was unable to rise any further due to the slowdown in construction. On the other hand, steel mills still tried to export more products and so market inventories were at a low level. Meanwhile, the Zinc price continued at an elevated level. As a result, the market price of HDG remained stable this week. With the trading volume seeing no improvement, the attitude of traders began to change. Thus, HDG market prices fluctuated in some regions. This week, the domestic zinc price was RMB 36,500/mt ($4,673/mt), unchanged compared with last week. In addition, also this week, the January 2007 ex-factory prices of Masteel HDG increased RMB 100/mt ($13/mt). Meanwhile, the prices of LianYuan Steel and Hengtong HDG remained unchanged compared with December 2006. Summing up, the market price of HDG is expected to maintain its stable trend.