Despite the climbing levels of market inventories, the Chinese hot rolled market has kept moving on an upward trend throughout the past week, contrary to the expectations of many market traders. In order to recover losses suffered during the previous market decline, traders have generally availed of the rising market trend to raise their sales prices.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
3,600 |
+150 |
528 |
HR |
2.75 mm x 1,250 mm |
Q235B |
3,770 |
+143 |
553 |
As reported by traders, over the past week the domestic hot rolled market registered a certain increase in the trading volume with market prices staying on their upward trend. However, most deals were concluded between traders.
In spite of the ascending price levels in the current market, many traders continue to express concerns over the substantial levels of market inventory - regarded as a significant factor limiting the upward movement of prices. With little inventory pressure sensed by mills and downstream users, the very high inventory levels among traders receive their main support from the sufficient availability of capital supply to market players. Thus, once capital shortages reappear in the future market, prices are likely to drop down again.
In the past week, hot rolled inventory in China's leading markets has continued to rise. According to the latest figures, total hot rolled inventory in China's leading markets stands at 3.8642 million mt, up 2.0674 million mt year on year. Moreover, hot rolled inventory in Shanghai amounted to 1.2729 million mt on October 23, up 18,940 mt compared with the level on October 17.
Several domestic mills have made adjustments to their hot rolled prices during the past week, most being in a downward direction.
On October 20, Liuzhou Steel announced an upward adjustment of RMB 50/mt ($7/mt) to its HRC prices, with its 5.75 mm Q235 material now offered at RMB 3,900/mt ($572/mt).
On October 21, Shougang announced its ex-factory flats prices for November, with its HRC prices down by RMB 300/mt ($44/mt). Thus, 5.5 mm x 1,500 mm Q235 HRC is now offered at RMB 3,360/mt ($493/mt).
Meanwhile, also on October 21, Ningbo Steel made a reduction of RMB 70/mt ($10/mt) to its HRC prices, with its 5.75 mm Q235 HRC now offered at RMB 3,380/mt ($496/mt).
On October 22, Rizhao Steel reduced its HRC prices by RMB 50/mt ($7/mt). As a result, its ex-factory price of 5.75 mm Q235 is now at RMB 3,410/mt ($500/mt).
All the above prices include 17 percent VAT. ($1 = RMB 6.82)
On the export side, quotations of Chinese HRC in the export market have been boosted by the recovery in the domestic market. At present, mainstream export quotations of Chinese HRC are around $480/mt FOB, up $10-30/mt week on week. It is heard that many Chinese mills are fully booked for December shipment. Domestic mills are not expected to release their quotations for January shipment until mid-November.
Overall, in the past week the Chinese hot rolled market has experienced a steady rebound despite the growing levels of market inventories - contrary to the expectations of most players. Nevertheless, with high inventory remaining a big problem at present, China's hot rolled market is unlikely to maintain its climbing trend in the coming period.