Prices have started to rebound in China's domestic HDG market during the past two weeks. For example, the price of SGCC 1.0 mm x 1,250 mm x C material produced by local steelmaker Angang has rebounded to RMB 4,700/mt, down from RMB 4,550/mt on 15, Oct.
The wave of increase in these two weeks is mainly due to the increase of HR forward prices in electronic transactions. And in the same time the transaction situation of spot HR got improvement, especailly when the prices have been close to the cost line. Seeing the prices rebound, most traders began to got more confident in mantality, which prevented the spot prices from declining. Also some leading mills in China raised the ex-works to support the wave of increase this week. And as for HDG market, the inventories were not high. So the increase was obvious. However, in these two days the HR forward prices have shown obviouse decrease, which also kicked the spot prices down. Although HDG prices have been flat these several days, we think it may be hard to show an obvious increase again in the next week.
As for the domestic mills, Bensteel this week issued its HDG ex-works prices for November, decreasing prices by RMB 450/mt ($65/mt) compared to its ex-works price for October. As a result, the price of 1.0 mm SGCC stands at RMB 4,140/mt ($607/mt), excluding 17 percent VAT.
As for the export situation, in September China's export of galvanized plates and strips was 242247.135 mt, 27.7% higher than that of August, which was 189658.79 mt. As for import situation, in August China's import of galvanized plates and strips was 376220.207 mt, 10.5% higher than that of August, which was 340280.173 mt. And both the export and import quantity have reached the top level of this year since January.
Based on the situation observed this week, China's domestic HDG prices are now rebounding. But due to the HR forward prices influence, the increading trend may be replace by a more moderate movement in the next week.