China’s cold rolled market posts increase

Over the past week (December 9-16), domestic cold rolled prices have trended in an upward direction in the Chinese market, with the total cold rolled coil inventory in the leading domestic markets rising slightly.

During the first couple of days of the past week, China's domestic cold rolled market registered a stable trend; however, from December 10 on, local cold rolled prices have indicated an increase, mainly due to the new price lists issued for January by leading steelmakers Baosteel and WISCO. Accordingly, Baosteel and WISCO have respectively raised their cold rolled prices by RMB 550/mt ($81/mt) and RMB 800/mt ($44/mt). Considering that future supplies to the market may register a decrease, and also given that the government is expected to maintain policies favourable to the markets, most cold rolled traders are now fairly confident as regards the prospects for the market in the period ahead.

In November, according to the official statistics from the China Automotive Industry Association, China's automotive production and sales volumes both hit new historic highs, reaching 1,391,400 units and 1,337,700 units respectively, registering increases of 10.61 percent and 9.08 percent month on month, and up 104.2 percent and 96.43 percent year on year.

On the inventory side, total cold rolled coil inventory in the leading domestic markets has risen slightly. Cold rolled inventory in China's leading cities stands at 1,130,980 mt, up 2,090 mt compared with the previous month, and up 25 percent as compared to the same period of last year.

To sum up, China's current cold rolled market has been boosted by all the abovementioned positive factors. However, with the arrival of the traditional slow season, sales activity in the downstream industries has remained at a low level. As a result, it is expected that the domestic cold rolled market will move on a sideways trend in the coming week.