The Chinese domestic hot rolled market retained its rising movement in the first half of the past week before recording an obvious fall in the second half of the week. Meanwhile, at the very end of the week under discussion, i.e. on August 11, Chinese steel giant Baosteel made a strong upward adjustment to its ex-factory prices for flat steel products for the month of September, raising prices for all its flat steel products by RMB 600/mt ($88/mt).
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
4,090 |
-237 |
599 |
HR |
2.75 mm x 1,250 mm |
Q235B |
4,333 |
-94 |
634 |
On August 2, Jiangsu Province-based Shagang sharply hiked its HRC prices by RMB 700/mt ($102/mt), with its new ex-factory HRC prices at RMB 4,500/mt ($659/mt) for August. This upward adjustment drove overall market prices up significantly in the first half of the past week. However, lacking support from market demand, and also influenced by the fall in the steel futures market, hot rolled prices in China slid down during the remaining days of the week.
Generally speaking, the correction seen in prices has caused some traders to become pessimistic as regards the future; meanwhile, others traders think that it is just a normal market correction coming in the wake of the previous rapid increases. However, on August 11, Baosteel issued its ex-factory flats prices for September, strongly hiking the prices of all of its flat steel products by RMB 600/mt ($88/mt). It is generally thought that Baosteel's new price policy will help boost market prices, but it remains to be seen to what extent the market will be affected.
According to the latest figures, hot rolled inventory in Shanghai amounted to 900,000 mt on August 6, down 10,000 mt compared with the level on July 30.
Following the rapid increase in hot rolled prices in the domestic market, export quotations of Chinese HRC have also climbed up, but have only seen few takers. At present, mainstream quotations of Chinese HRC in the export market are at the level of $600/mt, up by $80/mt or so compared with the mid-July levels. Some exporters state that deals are unlikely to be concluded at the current high levels.
Overall, considering the very strong price increases seen previously and also the relatively flat levels of market demand, China's domestic hot rolled market would normally have been expected to continue its correction during the coming week. However, it now remains to be seen what impact Baosteel's sharp price hike will have on the market.