Chinese CRC market remains stable, demand shows weakness

During the past week, the Chinese cold rolled coil (CRC) market generally remained stable. Just small fluctuations were seen in market prices, while demand was on the low side. Most traders are maintaining a wait-and-see approach to the market.

On August 18, prices of ST12 1.0 mm × 1,250 mm × C CRC stand at RMB 5,140/mt ($758/mt), RMB 5,150/mt ($759/mt) and RMB 5,350/mt ($789/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 ($797/mt), RMB 5,250/mt ($774/mt) and RMB 5,600/mt ($825/mt) respectively in the Shanghai, Tianjin and Lecong markets. All the above prices include 17 percent VAT (US$1 = RMB 6.78).

Influenced by the domestic stock market and steel futures market, local CRC traders are maintaining a wait-and-see policy. Transactions this week have been limited, mainly due to the high cost of supplies and the low season for demand. During the past week, Chinese steelmakers raised their ex-mill CRC product prices, but the decline in transactions indicated the lack of any positive response from traders to the price increases.

Generally, demand in the market has not showed signs of getting better, while there has been no improvement in demand from end-user industries such as automotive and appliances. Government policy has also failed to inspire confidence in the market. Most traders are cautious about the future market.

Aggregate cold rolled coil inventory in the main Chinese cities has continued to increase, standing at 1,378,438 mt on August 13, 4,650 mt more than on August 6. The southern Chinese market saw the greatest increase in inventory in the week in question. On August 13, CRC inventory in Shanghai totaled 472,080 mt, up 50 mt week on week.

Generally speaking, it is expected that the Chinese CRC market will see just small fluctuations in the coming week.