China's domestic HDG prices have begun to decrease following over three months of rising movement. 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 5,250/mt, down from RMB 5,450/mt last Thursday.
This week steel futures prices in China began to decrease, exerting a negative impact on the confidence of traders. With spot prices having reached high levels, the transaction situation is not good. İn addition, demand at this time of year is traditionally low, while the decreasing movement of local HR and CR prices has also influenced the HDG price trend. Although Chinese steel giant Baosteel this week strongly hiked its ex-works prices for flats, the impact of the producer's upward adjustment has been small. Generally speaking, it is normal for the market to register a short-term decrease following a long-standing upward movement. As a result, most of the market players are now in wait-and-see mode. After all, this is only the first week of obvious decrease, and no one knows whether it is just a temporary correction or a more permanent trend.
With regard to the export situation, currently 1.0 mm thick HDG with 100g/m² zinc coating is being offered at $680-700/mt FOB China main ports. Although spot prices have begun to fall, international traders are maintaining offer prices stable for the time being as they wait to see what happens next.
As for the domestic mills, Baosteel this week issued its HDG ex-works prices for September, raising prices by RMB 600/mt ($87/mt). As a result, this producer's price of 1.0 mm DC51D+Z now stands at RMB 5,377/mt ($787/mt), excluding 17 percent VAT. However, the producer's price adjustment does not seem to be having the anticipated impact on the market.
Based on the situation observed this week, the continuous rising trend of HDG prices has come to an end; however, as this is just the first week of downward movement, market players need to proceed with caution.