The Chinese hot dip galvanized (HDG) market has trended downward towards the end of the past week after following a stable movement earlier in the week. Currently there is some confusion surrounding market quotations. The general transaction situation is not good.
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 | 5,457 | -10 | 813 | -1 |
Thin HDG | 0.5mm x 1,000 mm | SGCC | 5,620 | -23 | 838 | -3 |
In the Shanghai market on September 16, the price of SGCC 1.0 mm x 1,250 mm x C HDG was at RMB 5,290/mt ($788/mt). The same product was sold on this date at RMB 5,680/mt ($846mt) in the Guangzhou market and at RMB 5,400/mt ($805/mt) in the Boxing market. Meanwhile, also on September 16, prices of SGCC 0.5 mm x 1,000 mm x C HDG were at RMB 5,430/mt ($809/mt) in the Shanghai market, RMB 5,730/mt ($854/mt) in Guangzhou and RMB 5,700/mt ($849/mt) in the Boxing market. The above prices include 17 percent VAT (US$1 = RMB 6.71).
The transaction volume in the major HDG markets in China is weak, while the weakening of steel futures prices and the drop in prices of hot rolled and cold rolled products has caused traders to be less optimistic about the future market. Many traders are seeking to sell off products, causing HDG market prices to go down further, especially after September 13.
During the past week many traders have sought to reduce inventories in order to bring in cash and have been open to negotiation on their prices. However, although September is traditionally a busy month, market demand has not been getting better.
During the past week major domestic steelmakers Baosteel and Wuhan Iron and Steel (WISCO) published their product prices for October. Baosteel increased its HDG price by RMB 260/mt ($38/mt) and raised its prices for electro-galvanized coils by RMB 100/mt ($14/mt); meanwhile, WISCO increased its HDG price by RMB 200/mt ($29/mt). However, the steelmakers' upward price adjustments have not helped to push up market prices, while the cost factor is also providing inadequate support for market prices.
It is expected that in the short term China's hot dip galvanized market will not see any great decrease and that it will follow a fluctuating trend over the coming week.