Sluggish activity in local Chinese HDG market amid negative sentiment

During the week ending October 18, average prices in the Chinese domestic hot dip galvanized (HDG) market have softened slightly for thin specifications, though remaining stable for thick specifications, while transaction activity in the market has been at low levels. Average HDG prices in the local Chinese market are presented in the following table.  

During the given week, a case of fraud has been uncovered in the Boxing market, exerting a negative impact on the HDG market. HDG traders have been unwilling to sell due to concerns relating to the fraud issue, and this has resulted in low activity. Most HDG producers have been producing only what they need to product and have kept their inventories at low levels, which will ease the negative pressure on the HDG market. However, demand from downstream users has not shown any significant improvement. Meanwhile, the big declines in the stock market in China after the National Day holiday have negatively affected the commodity markets to some extent: for instance, HRC and rebar futures prices at Shanghai Futures Exchange (SHFE) have seen big declines on October 18. It is thought that HDG prices in the Chinese domestic market will likely edge down further in the coming week.

16 percent VAT is included in all prices and all prices are ex-warehouse.

$1 = 6.94 RMB