During the week ending May 24, prices of hot dip galvanized (HDG) in the Chinese domestic market have continued to follow a soft trend. Average HDG prices in the Chinese domestic market can be viewed in the SteelOrbis price reports section.
With more and more low-priced hot rolled coil (HRC) and full hard coil supplies flooding the domestic market, HDG traders are less confident about the future prospects for their market and so are purchasing fewer materials. While most traders now have low inventories, inventory pressure at the steel mills has increased.
According to some market players, HDG producers are now due to carry out overhaul work. Regarding the settlement prices of Tangshan, Hebei Province-based Chinese steel producer Guofeng Steel, customers think that prices may be RMB 100/mt ($15/mt) lower than last month, with some pessimists predicting that Guofeng Steel's settlement prices may be as low as RMB 4,200/mt ($664/mt) for this month, with the aim of attracting more orders. If the settlement prices announced by Guofeng Steel are very low, market confidence will be impacted negatively and prices will continue to drop down.
It is expected that HDG prices in the Chinese market will maintain their soft trend in the coming week. There seems to be little possibility of a rebound in HDG prices in the short term.