Activity in local Chinese HRC market remains at low levels

During the week ending September 27, average hot rolled coil (HRC) prices have indicated an overall upward trend, while transaction activity in the overall market has been at low levels. Average HRC prices in the local Chinese market are presented in the following table.

During the given week, HRC futures prices in China have mostly moved on a rebounding trend though indicating downward corrections on September 27, exerting a positive impact on HRC prices in the domestic spot market, while transaction activities in the spot market have not improved significantly, remaining slack. Meanwhile, regulations regarding overloading of transportation vehicles have been in force since September 21, pushing up freight charges and increasing costs for HRC supplies, while negatively impacting users’ willingness to conclude purchases. Currently, market players are mostly cautious on the future prospects for the market due to the slow consumption of HRC products in September. As the National Day Holiday (October 1-7) is approaching, more supplies will arrive in the market, which will increase the levels of uncertainty in the HRC market. However, at the same time there will be replenishment of HRC stocks by traders and end-users before the holiday. It is thought that HRC prices in the Chinese domestic market will edge up slightly in the coming week, while move on a stable trend during holiday. 

 

 

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

 

 $1 = RMB 6.67