Over the past week the Chinese hot rolled coil (HRC) market has continued its downward trend. Average quotations in the Shanghai, Tianjin and Lecong markets are currently lower than RMB 4,000/mt ($591/mt).
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) |
HR | 5.75 mm x 1,500 mm | Q235B | 3,920 | -187 | 579 |
HR | 2.75 mm x 1,250 mm | Q235B | 4,077 | -150 | 602 |
As of July 6, Q235/S400 5.75 mm HRC prices stand at RMB 3,930/mt ($581/mt) in the Shanghai market, RMB 3,830/mt in the Tianjin market and at RMB 4,000/mt in the Lecong market respectively. Q235 2.75 mm HRC prices stand at RMB 4,100/mt ($606/mt) in the Shanghai market, at RMB 3,900/mt ($576/mt) in the Tianjin market and at RMB 4,230/mt ($625/mt) in the Lecong market. All prices are ex-mill and include 17 percent VAT ( US$1 = RMB 6.77).
Confidence levels are at a low ebb in the Chinese HRC market after the decreases seen in the major local markets for this product. Some traders have lowered their prices further, causing end-users to adopt a wait-and-see approach, and so current market demand is extremely weak. The imbalance between supply and demand is now even greater. Market prices are lower than ex-mill prices.
On July 2, HRC inventory in the Shanghai market amounted to 1,663,780 mt, up 10,280 mt week on week.
On June 29, Xinyu Steel decreased its HRC price by RMB 50/mt ($7/mt), and thus its ex-mill price for Q235 5.75mm HRC has declined to RMB 4,100/mt ($606/mt). On July 1, Shagang Group and Laigang Group decreased their HRC prices by RMB 300/mt ($44/mt) and RMB 100/mt ($15/mt) respectively, with their respective ex-mill prices of Q235 5.75 mm HRC now standing at RMB 4,200/mt ($620/mt) and RMB 4,100/mt ($606/mt). On July 2, Jiuquan Iron and Steel (Group) Co., Ltd lowered its HRC price by RMB 60/mt ($9/mt), with its new ex-mill prices of Q235 5.75 mm HRC standing at RMB 4,190/mt ($619/mt). All prices are ex-mill and include 17 percent VAT (US$1 = RMB 6.77).
Generally speaking, as raw material prices continue to fall, the Chinese HRC market may drop down further. It is expected that in the coming week the market will continue its downward trend.