Despite the continuous decline observed in overall inventories of hot rolled coils, the various leading regional markets in China have still been facing relatively strong inventory pressure, with market prices consequently continuing to fluctuate on a weak trend throughout the past week. Given the successive arrivals of new import supplies, a long period of time is expected to be required for the market to consume inventories in the future.
Product name | Specification | Category | Average price(RMB/mt) | Weekly change (RMB/mt) | Price($/mt) |
HR | 5.75 mm x 1,500 mm | Q235B | 3,343 | +10 | 490 |
HR | 2.75 mm x 1,250 mm | Q235B | 3,510 | -17 | 514 |
Last week, China's hot rolled market moved on a fluctuating trend on the whole. At the beginning of the week, hot rolled prices in eastern China climbed up slightly, accompanied with a minor expansion in market demand - with the northern and southern markets following the trend of the eastern Chinese market. However, market trading activities cooled down again when the eastern market registered a slide during the middle of the week. Accordingly, market prices in the north and south also began to decline.
According to the latest statistics, hot rolled inventory in Lecong amounted to 676,400 mt on March 21, up 47,300 mt week on week, thus increasing the pressure on the local market. Meanwhile, hot rolled inventory in Shanghai has registered a steady decline, but remains at a relatively high level. By the end of the week, total inventory in Shanghai reached 782,490 mt, down 1,990 mt week on week.
The Chinese mills continued to slash their ex-factory prices for hot rolled coils over the past week. As a result, the ex-factory prices of 1,500 mm x 3.75 mm common carbon coils of some mills have dropped below current market levels.
Based on current ex-factory prices and market sales prices, it seems very hard for traders to make any profit in the current situation. Moreover, domestic hot rolled inventory levels have been moving on a downward trend in recent days, and this exerts a braking effect on any declining movement in the market. Nevertheless, considering the still significant inventory levels and also the successive arrivals of import materials, market prices are unlikely to shake off their weak trend in the short term.