Exports support flat prices in China

SteelOrbis Shanghai Chinese HRC prices slightly went up with minor fluctuations throughout last week, and the prices of CR and thin HR products saw a larger increase. However, the sales figures are bearish. The international market is the chief factor that influences the domestic HR and CR markets. The HR prices in Southeast Asia are still strong, and Chinese steel mills' export offers for CR sheet have reached $600/mt FOB. However, the rumors stating that the Chinese government might lower the export tax rebate made the steelmakers very prudent for their price quotations. Some steel mills decided not to accept new export orders. In the short run, the steelmakers' movements to hike the ex-factory prices reduced the orders from domestic traders, and drove up the market prices. On April 10, Anshan Steel hiked its prices for HR by RMB 280/mt ($35), and RMB 200/mt ($25) increase for CR products. In the domestic markets, the new hot rolled coil ex-factory price of Shagang announced on April 3 drove up the average prices for 5.75 mm products to RMB 3,800/mt ($474) yesterday. Afterwards, market prices reduced somewhat due to the sluggish business activity. The influence of the market supply on the prices increased. Besides, HRC prices in different markets are similar. But in the Shanghai market, there are plenty of 7.5 mm and thicker products and their prices are about RMB 100/mt ($12) lower than that of 5.75 mm products. On the other hand, there are not enough 3.0 mm HRC products in the market. SteelOrbis learnt that Zhujiang Steel and Lianyuan Steel can only supply 40 percent of their ordinary thin product volume for April. In May, Taiyuan Steel will have overhaul works for approximately six days, which will affect 50,000 metric tons of output. Thin products' prices increased obviously last week thanks to the small quantity. Baotou and Handan Steel have plenty of cold rolled coils; therefore, their prices are stable. However, prices of Anshan and Benxi Steel are high due to their short supply. In addition, the average price of 3.0 mm CR sheet is at RMB 5,400/mt ($674), RMB 200/mt ($25) higher than 1.0 mm prices. In the short term, the HR and CR prices are expected to see minor fluctuations in general.