In China's domestic market cold rolled prices started to decline towards the end of the past week (August 5-12) after peaking in the middle of the week in question. Following the rapid turnaround in the direction of prices, the market has suddenly become stagnant, with sales activity now much slower.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
1.0 mm x 1,250 x C |
SPCC |
5,333 |
-77 |
781 |
|
CRS |
1.0 mm x 1,250 x 2,500 |
SPCC |
5,450 |
-50 |
798 |
The main reasons for such a change in the direction of prices are as follows: on the one hand, after the continuous price increases in previous weeks, end-users have become more and more cautious about concluding purchases; on the other hand, the latest price hike by domestic steelmaker WISCO during the week in question disturbed market players' expectations as regards the future market. In addition, the significant decreases of hot rolled prices in the domestic market have damaged the confidence of traders somewhat.
Based on census data for August 7, cold rolled inventory in the Shanghai market stood at 311,600 mt, down 2,000 mt from the previous week.
On August 11, domestic steelmaker Baosteel issued its ex-factory prices for flat products for September. Accordingly, the producer's cold rolled coil price has been raised by RMB 600/mt ($88/mt). Thus, the list price of DC01 1.0 mm x 1,250 mm x C is now at RMB 5,126/mt ($751/mt) ex-mill. The price excludes 17 percent VAT and is effective from August 11.
Data issued by the China Federation of Logistics and Purchasing show that the Purchase Management Index (PMI) in China rose slightly to 53.3 percent in July, from 53.2 percent in June, staying above 50 percent for the fifth consecutive month.
Despite Baosteel's increased prices, it is expected that China's domestic cold rolled market will remain on its downward trend over the coming week.