SteelOrbis Shanghai After the sharp jump over the previous week, China's hot rolled market went back down last week. As for cold rolled prices, their upward step saw a slowdown. Driven by the rising prices in the domestic market, the export quotations of China's HR coil increased and have also been accepted by the international market. On January 15, the average price quotation of 5.75 mm x 1,500 mm x C SS400 hot rolled coil in Tianjin, Shanghai and Lecong was down RMB 4/mt ($1/mt) to RMB 3,993/mt ($513/mt), while that of 2.75 mm x 1,250 mm x C Q235B hot rolled coil was up RMB 73/mt ($9/mt) to RMB 4,240/mt ($544/mt). Meanwhile, the average price of 1.0 mm x 1,250 mm x 2,500 mm ST12 rose RMB 40/mt ($5/mt) to RMB 5,033/mt ($646/mt), while that of 1.0 mm x 1,250 mm x C ST12 increased RMB 34/mt ($4/mt) to RMB 5,007/mt ($643/mt). With regard to hot rolled, due to the rapid soaring of the market after the holiday, market players were eager to sell off products and reap profits, resulting in the market decline in eastern and southern
China over the past week. Last week, the prices of thick coils at one point rushed up to the RMB 4,040/mt ($519) mark in the Shanghai market. After that, however, prices saw a rapid fall, with the biggest decrease reaching RMB 100/mt ($13/mt). Thereupon, many market players again started to make purchases, boosting up the market prices once more. Basically, the Guangzhou market saw a similiar performance to that seen in Shanghai. However, influenced by the bulky supplies from Liuzhou Steel and the low-price supplies from Rizhao Steel, the market prices are still in the downward trend currently. Some local distributors reported that, since Rizhao Steel has just commenced
production operations on their new line, they have adopted a low-price strategy in order to open up the market, thus affecting the local market price. As regards the market in Tianjin, stability dominated with almost no change seen in overall inventory. Generally speaking, the price adjustment in the hot rolled market came as a reaction to the period of excessive increase. However, the market is likely to move up steadily over the next week. Due to the rising domestic prices, Chinese mills successively hiked their export quotations. It was only during the previous week that Tongzhou Steel concluded an export
trading deal for 4.0-8.0 mm hot rolled coils with a Korean customer at $490/mt CFR. In addition, the export quotation of Tangshan Steel is at $480/mt FOB, up $20/mt compared with the previous weeks. With regards to cold rolled coil, the Chinese domestic market continued its steady upward trend throughout the past week. However, coming towards the end of the week, the rate of increase seemed to experience a slowdown, mainly because many traders were eager to cash in their profits. Some market players estimate that due to the brisk demand for CR coils and the low market inventory, the market prices are unlikely to see any decrease. Once the mills continue to raise their ex-factory prices, the market prices can be expected to move up further. However, for the coming week the market is expected to remain stable.