The Chinese hot rolled market continued its downward movement throughout the past week. Meanwhile, various domestic mills again slashed their ex-factory HR prices, with the biggest downward adjustment of RMB 700/mt ($102/mt) made by Shagang to its HR prices. In addition, hot rolled inventory in China's leading markets has continued to rise, thus increasing the supply pressure on the market to a certain extent.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
3,587 |
-80 |
525 |
HR |
2.75 mm x 1,250 mm |
Q235B |
3,750 |
-120 |
549 |
On the mills' side, on September 1, Shagang, Lianyuan Steel, Taishan Steel, Rizhao Steel and Hebei Steel announced reductions of their HR prices by margins ranging from RMB 50/mt ($7/mt) to RMB 700/mt ($102/mt). As a result, Shangang's 5.75 mm Q235 hot rolled coils are now offered at RMB 3,800/mt ($556/mt), Lianyuan Steel's price for the same material stands at RMB 4,100/mt ($600/mt), Taishan Steel's price is RMB 3,700/mt ($542/mt), Rizhao Steel's price is RMB 4,200/mt ($615/mt), while the same material from Hebei Steel Group costs RMB 4,050/mt ($593/mt).
On September 7, Chinese steel giant Baosteel issued its ex-factory prices for flat steel products for the month of October. SS400 prices have decreased by RMB 300/mt ($44/mt), while SPHC prices are down by RMB 200/mt ($29/mt). Following the adjustment, the new price of 5.75 mm x 1,250 mm x C SS400 is now at RMB 4,242/mt ($621/mt), while that of 2.0 mm x 1,250 mm x C SPHC stands at RMB 4,792/mt ($702/mt).
According to the latest figures, total hot rolled inventory in China's leading markets was still on the rise in the past week. For instance, hot rolled inventory in Shanghai amounted to 936,800 mt on September 4, up 26,800 mt compared with the level on August 27.
The decline of the market has significantly hit the confidence of market players. Althought some leading mills have issued certain preferential policies aimed at stimulating sales, most traders have still maintained a wait-and-see stance given the rising market inventory levels and insufficient demand. According to some industrial insiders, no great change has been observed in downstream demand in the recent market, which has been overwhelmed by excessive levels of steel production.
On the whole, the conflict between supply and demand remains the main factor determining the trend of the Chinese hot rolled market, and so the current market is quite sensitive to news relating to mills' production and sales situation, to production cuts or suspensions, and also to developments in the export market. In addition, following the announcement of Baosteel's October prices, Angang and Benxi Steel are likely to release their new prices in the coming week. Regarding the future, China's domestic hot rolled market is expected to register a mild fluctuating trend in the short term.