Due to the shrinking inventories, improved transaction situation and the increased raw materials prices, domestic HDG prices in China have continued to rise over the past week, just like other finished steel products such as HR, CR, rebar and wire rod. To most traders the current circumstance seem to present a good opportunity to make up for the previous market sluggishness. However, this week HR, CR, rebar and wire rod prices have begun to show some negative tendencies in certain individual markets. As a result, some players believe that the current price increase phase could soon come to an end, and that market prices may soon reach peak levels for the first half of the year. At any rate, the increasing trend seems to be slowing down and most traders are about to prepare themselves for a new downtrend in the market. Nobody in the market thinks the current increase trend will last for long.
With regard to the export situation, 1.0 mm thick HDG with 100g/m2 Zn coating is being offered at $510-530/mt FOB CMP. The prices vary according to the producer. Meanwhile, 0.5 mm thick HDG is still at $590/mt FOB CMP, the same level as last week. Although there are more enquiries than before, the dull export situation means that it is difficult for export prices to increase.
Based on the situation observed this week, the upward movement in China's domestic HDG market may continue into next week. However, domestic HDG prices may soon see some corrections in some individual markets. In the long run, it is still hard to have confidence in a full market recovery. Nevertheless, steel prices would appear to have already touched bottom levels in the current crisis period.