Slight decline for Chinese HR and CR prices

SteelOrbis Shanghai The basic aspects of Chinese HR and CR markets are gradually changing. The export market is temporary stable. Besides, the softened domestic business activity brings the HR and CR prices down, especially for CR prices. The long time sluggish domestic market has an increasing influence on hot and cold rolled product prices despite ex-factory price increases of mills. On April 21, Benxi Steel hiked its hot and cold rolled product prices by RMB 190/mt ($24) and RMB 280/mt ($35), respectively. However, hot and cold rolled product prices continued seeing minor declines in each market. On the other hand, the tight availability spurred the price drop. Data show that the hot rolled inventory at major warehouses in Shanghai is decreasing. The current volume is around 460,000 metric tons. The situation is worse for cold rolled products. The unfavorable transaction volume of Tangshan and Lianyuan Steel's low priced cold rolled products led them to cut their prices further. The rumors regarding the export tax rebate have some influence on the current export market of finished steel. Both traders and steelmakers are cautious in quoting prices, while some exporters stopped making offers temporarily. Hot rolled coil export offers have remained stable throughout last week, with the prevailing prices at $470-500/mt FOB. The export condition of cold rolled products is not as good as that of hot rolled coils. Although current domestic price levels are weak, the trade situation in export market is good and the domestic supply is tight. Any obstacle that might arise in front of exports or an increase in supplies may also affect the prices accordingly. Therefore, most traders are cautious and keeping their inventories at low levels. Nevertheless, some traders and end users stockpiled products for May Day; therefore, prices may slightly increase towards the end of the week.