In the past week the Chinese HRC market continued its upward movement, posting a strong rising trend. For the coming period, local HRC traders remain bullish on the prospects for the domestic market.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) |
HR | 5.75 mm x 1,500 mm | Q235B | 4,297 | +217 | 611 |
HR | 2.75 mm x 1,250 mm | Q235B | 4,297 | +200 | 630 |
HRC market prices in Shanghai, Tianjin and Lecong have witnessed very strong increases over the past week, while activity as regards transactions has been positive. With many traders anticipating further price increases, they are inclined to withhold their products for the time being. Meanwhile, the continuously increasing prices have made some end-users more eager to purchase. As for the future trend, most traders share an optimistic view, considering the current recovery of the market. In addition, current reports would seem to point to significant imminent increases in iron ore prices. It is expected that steel plants will make upward adjustments to their prices, thereby providing support for market prices.
Since the start of the current year, the main local Chinese markets have lately posted their first decrease in inventory levels. Overall HRC inventory in the main Chinese market stands at 5,058,900 mt, down 58,780 mt compared with last week but marking an increase of 99.85 percent year on year. Looking at the different regions, eastern China saw the biggest drop in HRC inventory, followed by northern China. On March 12, HRC inventory in Shanghai stood at 1,846,660 mt, down 8,290 mt from 1,854,980 mt on March 5.
Rizhao Steel raised its HRC price by RMB 50/mt ($7/mt) on March 9 and again by the same margin on March 10. As a result, the producer's current ex-factory price for Q235 5.75 mm HRC is RMB 4,153/mt ($609/mt).On March 10, Laigang raised its HRC price by RMB 50/mt ($7/mt), with its Q235 5.75 mm ex-factory price climbing to RMB 3,950/mt ($579/mt).On March 11, Taigang's HRC price rose by RMB 100/mt ($15/mt), with its ex-factory price for Q235 5.75 mm material increasing to RMB 4,100/mt ($601/mt).
Over the past week the ex-China HRC price of $570/mt FOB which was available in the previous week has disappeared. The current mainstream export price stands at $600/mt FOB, with the price of several large producers reaching as high as $630/mt FOB. Relatively low prices of $580-590/mt FOB have also been heard in the market.
In conclusion, the present Chinese HRC prices are strongly supported by costs. It is expected that the Chinese HRC market will continue its upward trend in the coming week; however, since the increase over the past week has been comparatively strong, a slowdown in the rising movement of the market is anticipated.