Prices have continued to increase 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 has increased to RMB 4,870/mt, up from RMB 4,810/mt last Thursday.
This week HDG prices in China continued to increase although the transaction situation was not good. With some leading mills such as Ansteel and Bensteel this week increasing their ex-works prices for December, traders have also been encouraged to continue to raise their prices. Nevertheless, downstream users are maintaining a wait-and-see stance and have reduced their purchasing quantities as they feel that demand is not high enough to support the continuous increase of prices. Users prefer to wait a while in the hope that the uptrend will level off. Meanwhile, the increases in HR prices and in steel futures prices are having a positive influence on the domestic HDG market.
As regards the domestic mills, Ansteel this week issued its HDG ex-works prices for December, increasing its prices by RMB 400/mt ($58/mt) compared with the November levels. As a result, the producer's price of 1.0 mm ST01Z stands at RMB 4,450/mt ($652/mt), excluding 17 percent VAT. Also this week, Bensteel increased its HDG ex-works prices for December by RMB 320/mt ($46/mt). As a result, the producer's price of 1.0 mm SGCC stands at RMB 4,460/mt ($653/mt), excluding 17 percent VAT.
As for the HDG production situation, in October China's output of galvanized plates and strips was 1,821,400 mt, 4.64 percent higher than the September volume of 1,740,700 mt.
Based on the situation observed this week, China's domestic HDG prices may continue to climb up in the coming week due to the support of local HR market prices and steel futures prices. However, given the dull transaction situation, the increase may not last long.