During the week ending October 18, Chinese domestic sales prices of hot rolled coil (HRC) have decreased amid the overall pessimistic expectations of traders. As of October 18, the average prices of hot rolled steel products in the main Chinese cities are as follows:
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
4,390 |
-170 |
689 |
-27 |
HR |
2.75 mm x 1,250 mm |
Q235B |
4,587 |
-136 |
720 |
-21 |
As of October 18, the prices of Q235/S400 5.75 mm hot rolled coil (HRC) in Shanghai, Tianjin and Lecong are respectively RMB 4,320/mt ($678/mt), RMB 4,340/mt ($681/mt) and RMB 4,510/mt ($708/mt). For Q235 2.75 mm HRC, prices are at RMB 4,580/mt ($719/mt), RMB 4,410/mt ($692/mt) and RMB 4,770/mt ($749/mt) in the abovementioned cities. All prices include 17 percent VAT.
At present, there exists a number of factors which exert a negative influence on China's HRC market, and indeed on China's other domestic finished steel product markets: Firstly, Brazilian miner Vale's recent decision to cut its iron ore price from $175/mt to $160/mt will result in a reduction of steel production costs. Secondly, the difficult economic situation in Europe, the declines in the stock markets and the inactive futures markets have together increased the pessimism of traders in the Chinese steel market. Finally, as certain steel producers have announced reductions in their ex-mill prices or some discounts for customers, traders have become less hopeful for the prospects of positive price movement in China's HRC market.
In the current declining market situation, some traders are eagerly seeking to shift out inventories in order to bring in cash quickly. Others traders with low inventory have chosen to maintain a wait-and-see stance.
In consideration of the negative factors influencing the market, it is expected that market prices of HRC in China will continue to follow a downward trend in the week ahead.