Chinese HDG market trends sideways

In the past week, China's hot dip galvanized (HDG) market has trended stable, while the market transaction volume has been unimpressive. Market inventories are more or less at normal levels, though slightly on the low side.
 
On May 19, the price of SGCC 1.0 mm x 1,250 mm x C HDG is at RMB 5,830/mt ($893/mt), RMB 5,950/mt ($911mt) and at RMB 5,670/mt ($868/mt) in the Shanghai, Guangzhou and Boxing markets respectively. Meanwhile, prices of SGCC 0.5 mm x 1,000 mm x C HDG are at RMB 5,750/mt ($881/mt) in the Shanghai market, RMB 6,400/mt ($980/mt) in Guangzhou and RMB 5,650/mt ($865/mt) in the Boxing market. The above prices include 17 percent VAT (US$1 = RMB 6.53).
 
During the past week, HDG prices in the major Chinese markets have been mainly stable, with low shipments observed in the market. On the one hand, the normal or even slightly low levels of market inventory have provided support for market prices; on the other hand, due to the relatively sluggish demand from end-users, traders are not eager to purchase from the mills, thus contributing to the current tepid situation.
 
At present, some mills have come under increased pressure from inventory in line with the reduction in shipments to traders. Some cold rolled full hard producers indicate that they have lowered their quotations due to their poor shipment volumes. Other mills have so far kept their prices stable, due to the lack of clarity regarding the future price trend.
 
It is expected that the Chinese HDG market may soften in the coming week.