During the past week in China's domestic HDG market, prices posted an upward movement last Friday before resuming their previous decline during the remainder of the week. For example, the price of SGCC 1.0 mm x 1,250 mm x C material produced by local steelmaker Angang jumped to RMB 5,000/mt last Friday, up from RMB 4,950/mt last Thursday, before declining to the current level of RMB 4,900/mt.
Following the obvious decrease seen in the previous week, HDG spot prices in China showed some fluctuations in the past week. Due to the sharp decreases seen in market prices and the continuing decline in steel futures prices, traders in China's domestic HDG market have become increasingly pessimistic. In addition, demand now is weak due to the current low season. However, inventories are not high at the present time and the leading mills in China have continued to raise their ex-works prices in order to provide support for the market. As a result, the decrease trend in China's HDG market has slowed down. Baosteel, Bensteel, Shousteel and WISCO have all raised their ex-works prices, and more mills are likely to follow the example of these leading mills. Consequently, in the coming weeks a fluctuating movement is expected to replace the previous sharp decreasing movement. Meanwhile, most local market players are thought likely to maintain a wait-and-see attitude.
As for the domestic mills, last Friday Baosteel issued its HDG ex-works prices for September, raising its levels by RMB 500/mt ($73/mt). As a result, the producer's price of 1.0 mm DX51D+Z stands at RMB 4,777/mt ($699/mt), excluding 17 percent VAT. Bensteel last Friday issued its HDG ex-works prices for September, raising its levels by RMB 430/mt ($62/mt). As a result, the producer's price of 1.0 mm SGCC stands at RMB 4,710/mt ($689/mt), excluding 17 percent VAT. This week Shousteel issued its HDG ex-works prices for September, raising its levels by RMB 200/mt ($29/mt). As a result, the producer's price of 1.0 mm St01Z stands at RMB 5,650/mt ($827/mt), including 17 percent VAT.
Based on the situation observed this week, during the coming week a fluctuating movement is still expected to be seen in place of the previous strong downtrend, though the overall market tendency will continue to be in a downward direction.