China's domestic HDG prices continued to decrease as we expected in our last report. For example, the price of SGCC 1.0 mm x 1,250 mm x C material produced by local steelmaker Angang has decreased to RMB 4,950/mt, down from RMB 5,250/mt last Thursday.
This week steel futures prices in China continue to decrease with the prices of spot prices. Although big mills try to raise their ex-works to avoid the further downturn, it seems have no effect up to now. For example, Ansteel raises its ex-work prices for September by RMB 200/mt this week. And Tangshan Hengtong raises its ex-work prices for September by RMB 500/mt this week. Now in the market the inventories are not high. But with the fall of almost all the steel products prices, the traders' mentality had been negative. Some of them believe the fall is because of the previous sharp increase and soon will cease. But others think in this low season time, downward of the spot prices is very common, especially after a strange increase. Now the prices movement has reflected the real market situation. And of course with the continuous fall, the transaction situation is not good. Purchasers are happy for the decrease and purchase less products in this quick decrease time.
With regard to the export situation, currently 1.0 mm thick HDG with 100g/m² zinc coating is being offered at $650/mt FOB China main ports, $30/mt down from the previous week. Concerning the quick decrease of domestic prices, traders have to low their offer prices.
Based on the situation observed this week, the falling situation may continue into next week in this low season time. But due to the not high inventories and sharp degree, maybe it won't last so long as it increased previously.