During the week ending July 31, the downtrend observed in the Chinese domestic hot rolled coil (HRC) market seems to have slowed down, with increases also seen. Average prices of HRC in China can be viewed in the SteelOrbis price reports section.
Following the sharp decrease in prices in the previous two weeks, many Chinese traders have started to push for higher prices. However, some traders have kept their offers stable or are continuing to negotiate on prices in order to attract bookings. At the current time, the market is characterized by a certain degree of confusion as regards prices .
According to the China Iron and Steel Association (CISA), in mid-July (July 11-20) the average daily output of crude steel in China totaled 1.99 million mt, registering a very slight increase compared to early July. As a result, the domestic steel market will likely remain under pressure from high supply volumes. Despite reports of production cuts in China, there has been no significant reduction in output levels. At the same time, downstream users are still cautious, just purchasing very small tonnages.
Given weak demand and high steel output, it is difficult to foresee a significant recovery in the Chinese HRC market in the near term.