Prices have been following a fluctuating trend in China's domestic HDG market during the past week. For example, the price of SGCC 1.0 mm x 1,250 mm x C material produced by local steelmaker Angang initially increased to RMB 4,830/mt, up from RMB 4,700/mt last Thursday, before declining to the current level of RMB 4,810/mt.
This week HDG prices in China initially climbed up as HR prices increased under the influence of the steel futures market, while it was also heard that some leading mills would make significant increases to their ex-works prices. However, after HDG prices increased, the transaction volume began to shrink as buyers were reluctant to accept the high prices. As a result, local HDG prices have come down again in the last few days. Nevertheless, traders still have confidence in the market despite the price decline. İf HR prices maintain an increasing trend in the coming week, then HDG prices will follow their example and will also rise. Against this, Baosteel this week maintained its ex-works unchanged, reflecting the current cautious approach of this leading mill to the market. In this context, any increase in HDG prices is not likely to be very big.
As for the domestic mills, Baosteel this week issued its HDG ex-works prices for December, making no change compared to its ex-works price for November. As a result, the producer's price of 1.0 mm DC51D+Z stands at RMB 4,977/mt ($729/mt), excluding 17 percent VAT. Also this week, WISCO increased its HDG ex-works prices for December by RMB 100-300/mt ($14-43/mt).
Based on the situation observed this week, China's domestic HDG prices have now entered a fluctuating trend. However, if domestic HR prices continue to increase, then there is little possibility of domestic HDG prices registering a decrease, but a greater likelihood that they will rise.