Over the past week, traders in the Chinese domestic HDG market have not been very active in placing orders. At the same time, supplies are on the short side in the market following previous purchases concluded by end-users, and this has provided some support for local HDG prices.
However, insiders have told SteelOrbis that private sector steelmakers have plenty of HDG materials in stock and that some of these steelmakers plan to sell their HDG products at lower prices in the spot market at an appropriate time, which would likely increase supply pressure in the market in the near future.
Moreover, HRC and CRC prices have seen significant drops in the Chinese domestic market over the past week against the background of the sharp fall in the steel futures market, and this has also negatively impacted confidence levels in the HDG market.
It is thought that HDG prices in the local Chinese market will start to increase as demand improves when the weather becomes warmer.