Over the past week China's domestic HDG market has continued to climb up, while relatively low inventories have been observed in some regional markets. Meanwhile, the obvious increases in cold rolled prices have also had a positive influence on the HDG market.
Product name | Specification | Category | Average price (RMB) | Weekly change (RMB) | Price (USD) | Weekly change (USD) |
Thick HDG | 1.0 mm x 1,250 mm | SGCC | 4,983 | +93 | 731 | +14 |
Thin HDG | 0.5 mm x 1,000 mm | SGCC | 5,263 | +90 | 772 | +13 |
Following the increases of mills' ex-factory prices, only slim profit margins are now left for most new arrivals of HDG in the market, with some regional market prices even lower than the costs of materials delivered to the market. For instance, the ex-factory price of 0.4 mm base plate from Tianjin Jiecheng is now at RMB 5,000/mt ($733/mt, tax included), with the price reaching RMB 4,870/mt ($714/mt, tax excluded) for delivery to the Boxing market, with current market prices in Boxing at around RMB 4,840-4,850/mt ($710-711/mt, tax excluded). At present, the prices of < 0.5 mm thin HDG delivered to the Boxing market are generally RMB 50-60/mt ($7-9/mt) lower than the market levels.
Many Chinese mills issued their December prices in recent days. Benxi Steel announced an increase of RMB 320/mt ($47/mt) for its HDG and CR prices, compared to November levels. On November 26, Shougang announced an upward adjustment of RMB 400/mt ($59/mt) to its HDG prices for December.
In the meantime, it is heard that Baosteel, WISCO, Angang, Benxi Steel and some other first tier mills are registering or will soon register various reductions in their output levels as a result of overhauling works taking place or due to take place coming up to the end of the year.
On the inventory side, many traders with relatively low inventories have had to be cautious as regards sales, trying to keep their sales volume at around ten percent of inventory. At present, in addition to the supply shortage of <1.0 mm thick HDG, the market supply of 1,000 mm wide materials has also started to show signs of tight availability. Meanwhile, considering the shrinkage of demand in the north, some traders have begun to send their materials to the eastern regions, and an increased flow of materials from the north to the south is expected to be seen in the near future.