Previously, thin HDG specifications were offered at higher prices in the local Chinese market due to shortage of availability. Over the past week, some traders received thin specification materials from neighboring markets, while some private sector steelmakers increased their production of such materials following a period of power supply restrictions. The consequent increase in supply has contributed to price declines for HDG materials with thin specifications.
In addition, SteelOrbis has been informed that in an important local HDG market, the Boxing market, the local government may seek to get some lands back on which new HDG plants have been built. Market participants state that this issue may exert a negative impact on the local HDG market.
Meanwhile, against the background of a downtrend in the steel futures market and insufficient transaction volumes in the HDG spot market, it is thought that domestic HDG prices in China will likely continue their slight downward trend in the coming week.