During the past week the Chinese hot rolled coil (HRC) market has fluctuated in an upward direction, while traders hold diverse opinions about the likely future trend of the market.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) |
HR | 5.75 mm x 1,500 mm | Q235B | 4,267 | +10 | 628 |
HR | 2.75 mm x 1,250 mm | Q235B | 4,363 | +6 | 643 |
On August 17, Q235/S400 5.75 mm HRC prices stand at RMB 4,250/mt ($625/mt), RMB 4,220/mt ($621/mt) and RMB 4,300/mt ($637/mt) respectively in the Shanghai, Tianjin and Lecong markets. In addition, Q235 2.75 mm HRC stands at RMB 4,350/mt ($640/mt), RMB 4,320/mt ($636/mt) and RMB 4,420/mt ($650/mt) respectively in the Shanghai, Tianjin and Lecong markets. All the above prices include 17 percent VAT (US$1 = RMB 6.79).
With major steelmakers in China making upward adjustments to prices, many players were expecting higher costs to push up market prices. However, market demand is currently low and inventory is high, and so most traders are now adopting a cautious approach.
During the past week, Baosteel, WISCO (Wuhan Iron and Steel), and Angang Steel published price policies on August 16 for September. Baosteel has maintained its HRC prices unchanged. WISCO has increased its HRC prices by RMB 260/mt ($260/mt), effective from August 16. At present, this producer's ex-mill price of Q235 5.5 mm × 1,500 mm HRC is RMB 4,160/mt ($612/mt), while its ex-mill price of SPHC 2.75 mm × 1,250 mm is RMB 4,300/mt ($633/mt). Angang Steel's HRC prices have increased by RMB 350/mt ($51/mt), effective from September 1. Thus, its new ex-mill price of Q235 5.5 mm × 1,500 mm common carbon HRC is RMB 3,720/mt ($547/mt). The above prices do not include 17 percent VAT (US$1 = RMB 6.79).
Inventory in the major Chinese markets has continued to increase. On August 13, total inventory in the main Chinese cities was 4.4593 million mt, up 19,500 mt week on week. The region with the greatest increase was the southern Chinese market. On August 13, inventory in Shanghai was 1,766,760 mt, up 8,177 mt week on week.
Generally speaking, influenced by costs, it is expected that next week the Chinese HRC market will still rise, while more time will be needed to observe the market transaction situation.