Quiet week for China's CR/HR markets

Quiet week for China’s CR/HR markets

With the end of summer approaching and parts of eastern China still recovering from the typhoon, China's flat-steel markets saw very little activity last week. Throughout last week, the prices of cold and hot rolled sheet fell slightly. The price of 5.5 mm hot rolled coil in both Tianjin and Guangzhou was down RMB 50/ton week on week by Friday (August 19). Prices finished the week at RMB 3'680/ton ($454) in Tianjin and RMB 3'760/ton ($464) in Guangzhou. In Shanghai, the price fell RMB 70 to end at RMB 3'680/ton ($454) on August 19. In terms of major markets, the only price change in 1.0 mm cold rolled sheet was in Shanghai. The price was RMB 5'800/ton ($716/ton) on August 12, but fell RMB 20/ton during the next week to finish at RMB 5'780/ton ($714/ton) on Friday (August 19). The main reason for the fall in Shanghai prices was a combination of low demand and greater supply as some traders increased their sales in the domestic market when their exports were prevented. Furthermore, major steel companies of China are preparing to carry out overhauls in September. Therefore, they are letting their inventories increase temporarily. Cold and hot rolled sheet production in China is expected to fall around 350'000 tons in September. Meanwhile, the international market for hot rolled and cold rolled products is recovering. Major US producers Nucor and US Steel announced that they would increase their hot rolled sheet prices to $500/ton in September. The market does not expect to see major changes this week. The price of hot rolled products may see further declines on a small scale; cold rolled prices may remain as are. However, we may start seeing some strong price movements in Chinese markets in September as product begins to drop off.