Over the past week (January 20-27) the Chinese cold rolled market has trended downward on a fluctuating trend. After the announcement by the government of a tightening in its monetary policy, the stock market and steel futures market in China both declined. In this context, China's domestic cold rolled market has shown signs of weakening over the week in question. Traders who had held a positive view of the prospects for the market have now started to offer at lower prices compared with the past few weeks.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) |
1.0 mm x 1,250 x C | SPCC | 5,470 | -40 | 802 | |
CRS | 1.0 mm x 1,250 x 2,500 | SPCC | 5,650 | -93 | 828 |
Nevertheless, with the mills' production costs still at high levels, most traders think that the decline seen over the past week does not mean that the market is at the start of a new phase of downward movement. At the same time, other traders have lowered their prices in order to fill their order books.
According to the latest figures, the major markets in China have witnessed a slight uptick in CRC inventories. As of January 22, aggregate cold rolled inventory in China's major markets stood at 1,164,990 mt, up 15,480 mt week on week. In the Shanghai market, cold rolled coil inventory stands at 385,490 mt, 3,680 mt more than in the previous week.
As of the current week, ex-China CRC materials of 1.0 mm thickness are offered at $675-680/mt FOB, down about $20/mt from the previous week, but with few deals being concluded.
In general, confidence levels among players in the Chinese domestic cold rolled market have dropped noticeably. It is expected that the domestic cold rolled coil market will continue to trend downward in the coming week.