HR strong on exports while CR remains stable

SteelOrbis Shanghai Most Chinese steelmakers have filled their export order books for hot rolled products, which brought them an opportunity to hike their prices. SteelOrbis learnt that leading Chinese mills such as Benxi Steel and Lianyuan Steel have filled export order books even for June shipments. In April, the HR export volume is expected to be in 400,000 - 450,000 metric tons range, slightly higher than the previous month. Following Baosteel's price hike for HR products on March 23, Shagang hiked its HR prices on April 1 by RMB 550/mt ($69), raising 5.5 mm prices to RMB 4,100/mt ($511). Upon opening on April 3, domestic hot rolled product prices rose around RMB 80/mt ($10) in each market. The prices of CR products are not as firm as those of HR, as more CR products are being produced and the CR export business is little. However, the current domestic price levels have not yet been accepted by the market. The business activity still remains bearish, imposing pressures on the price trend. Nevertheless, traders do not have much capital pressures in early April, and they are not willing to sell products due to the tight supply in the future. Yet, traders are worried about the current high price levels due to weaker demand. Generally speaking, the market prices are expected to remain close to the ex-factory levels due to the tight availability in the future, but the weak demand may prevent a continuous price increase. Instead, the prices may slightly decline following the increase. There is room for domestic hot and cold rolled product prices to go up in the long run, especially for HR prices. But in the short term, the prices may experience a slight downward trend. CR prices are expected to keep relatively less volatile at current levels.