Several factors have contributed to the upward trend of China's CRC market. First of all, traders are optimistic on the prospects for the market after the Spring Festival holiday and so some of them have already started to build up inventory in advance. Secondly, Baosteel has issued its prices for February delivery, raising its CRC product prices by RMB 120/mt ($19/mt). In addition, downstream demand has improved amid increased automotive sales and greater sales of household heating appliances during the winter season.
While higher CRC prices have brought in sufficient profits for market participants, there is also an increased risk that, as other steelmakers follow the example of Baosteel's price increases for CRC, excessive price rises could negatively impact downstream demand after the Spring Festival.
Overall, it is thought that CRC prices in the Chinese domestic market will continue their rising trend in the coming week, though with slower upward movement.