During the past week the Chinese cold rolled coil (CRC) market has continued to trend up, though a slowdown has been observed in transactions. Many traders are not as optimistic as before and are cautious about the future.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) |
1.0 mm × 1,250 mm × C | SPCC | 5,173 | +90 | 763 | |
CRS | 1.0 mm × 1,250 mm × 2,500 mm | SPCC | 5,420 | +110 | 799 |
On August 4, prices of ST12 1.0 mm × 1,250 mm × C CRC stand at RMB 5,120/mt ($756/mt), RMB 5,100/mt ($753/mt) and RMB 5,300/mt ($782/mt) respectively in the Shanghai, Tianjin and Lecong markets. In addition, prices of ST12 1.0 mm × 1,250 mm × 2,500 mm CRS stand at RMB 5,410/mt ($799/mt), RMB 5,200/mt ($768/mt) and RMB 5,650/mt ($834/mt) respectively in the Shanghai, Tianjin and Lecong markets. All the above prices include 17 percent VAT (US$1 = RMB 6.77).
During the past week, as CRC market prices increased, domestic steelmakers made upward adjustments to their base prices. Normally, such price hikes by the steelmakers help boost market prices and increase the confidence levels of traders; however, while these hikes have provided support for the upward trend in the CRC market this week, many traders do not plan to book large volumes due to the unclear situation in the market. Traders report that, although market prices have increased, the overall transaction volume is not great, with most transactions being concluded by long-term customers, while end-user demand remains low.
CRC inventory in the main Chinese cities has decreased a little. On July 30, aggregate inventory in the main cities stood at 1,376,070 mt, 10,890 mt less than on July 23. Eastern China saw the greatest decrease in inventory, while inventory in the southern Chinese market continued to increase. On July 30, CRC inventory in Shanghai totaled 465,080 mt, up 820 mt week on week.
Summing up, the increases in the domestic steel futures market and HRC prices as well as steelmakers' higher ex-mill prices provide support for the local CRC market; however, the CRC transaction volume has remained weak. Consequently, CRC traders in China are cautious about the prospects for the market trend in the month of August.