During the past week, Chinese domestic hot rolled coil (HRC) prices rebounded and posted an increase, while the transaction situation also improved compared to the previous week. However, most traders remain cautious about the prospects for the current rebound.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) |
HR | 5.75 mm x 1,500 mm | Q235B | 3,983 | +90 | 588 |
HR | 2.75 mm x 1,250 mm | Q235B | 4,097 | +87 | 604 |
As of July 20, quotations of Q235/S400 5.75 mm HRC stand at RMB 3,920/mt ($578/mt), RMB 3,950/mt ($582/mt) and RMB 4,080/mt ($601/mt) respectively in the Shanghai, Tianjin and Lecong markets. Quotations of Q235 2.75 mm material stand at RMB 4,070/mt ($600/mt), RMB 4,020/mt ($592/mt) and RMB 4,200/mt ($619/mt) respectively in the Shanghai, Tianjin and Lecong markets. All the above prices include 17 percent VAT.
Influenced by the increase in steel futures prices in China, domestic hot rolled coil prices recorded a rebound. Meanwhile, some traders delayed transactions, which helped push prices up further. Transactions are mostly between traders.
As for the short-term outlook, many traders are cautious about the rebound. Due to the sufficiency of supplies from major HRC producers, many people are worried about high HRC inventories. It is expected in the short term that the HRC market will not see a full recovery.
Major Chinese steelmakers published price policies during the past week. The HRC price adjustments in a range of RMB 200-350/mt ($29-51/mt) were all in a downward direction.
On July 13, Baosteel reduced its HRC prices by RMB 300/mt ($44/mt), with its Q235 5.75 mm HRC ex-mill price at RMB4, 042/mt ($596/mt).
On July 14, WISCO cuts its HRC price by RMB 300/mt ($44/mt), with its ex-mill price for Q235 5.75 mm HRC declining to RMB 3,900/mt ($575/mt).
On July 15, LY Steel and Angang Steel cut their HRC prices by RMB 200/mt ($29/mt) and RMB 350/mt ($51/mt) respectively, with their ex-mill prices of Q235 5.75 mm HRC declining to RMB 4,210/mt ($620/mt) and RMB 3,370/mt ($497/mt) respectively.
On July 16, Benxi Iron and Steel reduced its HRC price by RMB 200/mt ($29/mt), with its ex-mill price of Q235 5.75 mm HRC now at RMB 3,480/mt ($513/mt).
All the above prices include 17 percent VAT (US$1 = RMB 6.78).
Generally speaking, it is expected that the current rising trend in China's HRC prices will continue next week, though large increase will not be seen.