China's CR prices begin rebound

SteelOrbis Shanghai Influenced by the sharp decrease in inventory, cold rolled prices saw a remarkable rise over the past week, while the market trading performance was observed to be flat. Meanwhile, the hot rolled market showed stable movement with a slight increase seen in HR coils. On December 11, the average price quotation of 5.75 mm x 1,500 mm x C SS400 hot rolled coil in Tianjin, Shanghai and Lecong was at RMB 3,723/mt ($475/mt), neutral week on week; while that of 2.75 mm x 1,250 mm x C Q235B was up RMB 53/mt ($7/mt) to RMB 3,910/mt ($499/mt). In addition, the average price of 1.0 mm x 1,250 mm x 2,500 mm ST12 was up RMB 67/mt ($9/mt) to RMB 4,757/mt ($608/mt), while that of 1.0 mm x 1,250 mm x C ST12 was up RMB 50/mt ($6/mt) to RMB 4,733/mt ($604/mt). With regard to hot rolled products, the market remained stable in northern China, with a good trading performance and firm prices being seen in Tianjin. In eastern China, the market was back down, but just slightly. In the south of the country, however, with inventory at a low level, the market continued its slight upward trend, seeing brisk commercial activity. As regards cold rolled products, inventory dropped down sharply throughout the past week. In Shanghai, Lecong and other leading markets, the decrease range was much bigger than the average. Some major traders saw shortages of some varieties of products and had to buy them from medium or small traders so as to ensure their supplies to the end-users. Traditionally, China often sees relatively high steel consumption in December. Though traders felt that the trading volume did not expand greatly compared with the same period last year, the leading mills still insisted on their ex-factory prices under the support of direct supply and exports, thus maintaining domestic market prices. All in all, flat rolled inventory is quite low in the current domestic market, indicating a likely downward trend, with overall demand remaining at a high level. For the week ahead, hot rolled prices will again remain stable, while the cold rolled market is likely to continue with its small rebound. According to the latest figures released by the China Iron & Steel Association, HR and CR output did not change much compared with the previous month, which is also one of the major reasons for the slight fluctuation of market prices in November. China's HR output totaled 6.28 million mt in November, down 110,000 mt month on month and up 1.86 million mt or 42.1 percent year on year. The cumulative HR production for Jan-Nov totaled 61.68 million mt, up 14.68 million mt or 31.2 percent compared with the same period last year. CR output for November totaled 2.38 million mt, down 10,000 mt compared with the previous month and up 900,000 mt or 60.8 percent year on year. Meanwhile, cumulative CR production for Jan-Nov reached 22.89 million mt, up 7.62 million mt or 49.9 percent year on year.