Chinese cold rolled market continues strong performance

With the Chinese domestic cold rolled market still performing strongly on the back of the recent efforts of leading mills to push up prices, local market players have now become more upbeat about the prospects for the future market. At the same time, the recent bad weather conditions have hindered transportation in the last couple of weeks, and so there have hardly been any new arrivals in the main markets, which are now short of supplies of certain sizes. In this context, most traders have started to slow down their sales activities and are waiting for further price increases.

As prices indicating a continuous rise, market inventory been squeezed slightly due to the volume of sales concluded. During the past week, cold rolled coil inventories in the main Chinese cities have witnessed continued decreases. Total cold rolled inventory in the main cities now stands at 1,106,830 mt, down 23,750 mt compared to the previous week, and up 20 percent year on year. As of November 20, the cold rolled coil inventory in the Shanghai market stood at 358,230 mt, marking an increase of 450 mt week on week.

Meanwhile, in October China's cold rolled output stood at 346,670 mt, indicating a growth of 34.3 percent compared to the same period of last year and up 2.72 percent month on month. During the month, the daily output of cold rolled products registered a level of 11,180 mt, decreasing by 0.6 percent from last month. The decrease can be considered as a sign of the downward trend of producers' output. Considering that many mills will carry out big overhauls coming up to the end of the year, Chinese cold rolled output is expected to drop down in November and December.

To sum up, China's domestic cold rolled market has continued to move up during the past week, with orders from buyers increasing. Also supported by the recent uptrend in raw material costs, it is expected that the domestic cold rolled market will remain on its rising curve in the coming week.