China's flat product prices bottomed out

SteelOrbis Shanghai After touching the bottom last week, hot rolled product prices saw a rebound in China, while cold rolled product prices remained stable. On July 31, the average price of 5.75 mm x 1.500 mm SS400 hot rolled coil in Tianjin, Shanghai and Lecong increased RMB 117/mt ($15) week on week to RMB 3,600/mt ($451), and that of 2.75 mm x 1,250 mm Q235B hot rolled coil increased RMB 33/mt ($4) to RMB 4,000/mt ($501). The average price of imported 2.0 mm x 1,250 mm 08YU hot rolled coil climbed RMB 50/mt ($7) to RMB 4,250/mt ($533). After touching the bottom at around RMB 3,460/mt ($434) for thick hot rolled coil on July 25, some traders began pulling up their prices. In merely two or three days, the price increased to RMB 3,633/mt ($456). The rapid price rebound and sluggish commercial activity led the prices to decline once more beginning from the afternoon of July 28. On the cold rolled side, the average price of 1.0 mm x 1,250 mm x 2,500 mm ST12 sheet was RMB 4,773/mt ($598) and that of 1.0 mm x 1,250 ST12 coil was RMB 4,723/mt ($591) on July 31, both were up RMB 6/mt ($1) week on week. The average price of 0.6 mm x 1,250 mm 08YU imported cold rolled coil increased RMB 100/mt ($12) to RMB 5,000/mt ($627) on the same date. Influenced by the rebound of hot rolled prices, cold rolled market began also stopped decreasing and became stabilized. However, because of the bearish downstream demand, it lacked the momentum for a rebound. Nevertheless, the prices of certain mills' products increased. For example on July 31 in Shanghai, Tangshan Steel's 1.0 mm x 1,250 mm cold rolled coil price increased RMB 150/mt ($19) to RMB 4,300/mt ($540), and that of Handan Steel increased RMB 150/mt ($19) to RMB 4,400/mt ($552). Currently, we are in the slack season for domestic cold rolled product consumption. In spite of the sharp decrease in imports, the domestic production is still growing rapidly. Under these circumstances, the overall cold rolled market still faces a great pressure. The positive price movements started to make traders optimistic last week. Therefore, they are not willing to decrease their prices. However, the sudden price rebound can not get any support from the downstream side; therefore, the price is not expected to go up or down by a wide margin.