The Chinese hot dip galvanized (HDG) market has continued on its rising trend in the past week, supported in particular by costs. Although the transaction situation is not satisfactory, most traders are optimistic about the prospects for the market in the coming period. On January 13, 2011, the average HDG prices in the main markets in China are as follows:
Product Name |
Specification |
Category |
Average Price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
Thick HDG |
1.0mm x 1,250 mm |
SGCC |
5,557 |
+57 |
843 |
+9 |
Thin HDG |
0.5mm x 1,000 mm |
SGCC |
5,800 |
+20 |
880 |
+3 |
On January 13, the price of SGCC 1.0 mm x 1,250 mm x C HDG was at RMB 5,540/mt ($841/mt), RMB 5,730/mt ($869mt) and at RMB 5,400/mt ($819/mt) in the Shanghai, Guangzhou and Boxing markets respectively. Meanwhile, also on January 13, prices of SGCC 0.5 mm x 1,000 mm x C HDG were at RMB 5,600/mt ($850/mt) in the Shanghai market, RMB 6,250/mt ($948/mt) in Guangzhou and RMB 5,550/mt ($842/mt) in the Boxing market. The above prices include 17 percent VAT (US$1 = RMB 6.59).
During the past week, the Shanghai market registered the greatest increase among the major HDG markets in China, with HDG prices in the Shanghai market increasing by RMB 30-60/mt ($4-9/mt) week on week. The transaction situation has been good. Transactions were also concluded for high-priced HDG materials. Most local traders are optimistic about the market situation ahead of the Spring Festival. With Baosteel having increased its HRC prices, it is expected that other major domestic steelmakers will also move to increase their flat steel prices. Some traders with small HDG inventories in hand were reluctant to sell, but preferred to wait for prices to increase. Meanwhile, other traders sold their HDG materials in line with the market situation.
In Guangzhou, the local HDG market increased slightly while the transaction situation was normal. Local traders consider that current prices are on the high side. While tight energy supply and high costs have pushed spot market prices up, end-user demand is still sluggish. In this context, most local traders are cautiously optimistic on the future market.
In the Boxing market, HDG market quotations have followed a stable trend, though very slight decreases have been seen in transaction prices. Most HDG traders in the Boxing market have completed their winter inventory replenishment activity, and so the transaction volume has weakened. There is sufficient inventory in the market. Some traders have delivered products at RMB 20/mt ($3/mt) lower than mainstream prices.
Generally speaking, supported by high costs, players in the Chinese HDG market are mostly confident. Although the market transaction is on the weak side, prices have continued to increase. It is expected that the Chinese HDG market will remain strong in the coming week.