Chinese cold rolled market stills trends down slightly

Wednesday, 23 September 2009 15:27:26 (GMT+3)   |  
       

Over the past week (September 16-23) the Chinese cold rolled market has trended sideways to slightly down, with market inventories still on the rise. Census data show that China's domestic cold rolled output reached a new high in August. Against the background of high inventory, strong production volumes and slow market activity, market players are now less optimistic as regards the future market situation.

Product name

Specification

Category

Average price

(RMB/mt)

Weekly change (RMB/mt)

Price

($/mt)

CRC

1.0 mm x 1,250 x C

SPCC

4,760

-43

698

CRS

1.0 mm x 1,250 x 2,500

SPCC

4,920

-7

721

The downward adjustments seen in domestic mills' prices have to a certain extent provided relief for some traders, while not-so-low priced new arrivals will probably help slow the falling trend of market prices. On the other hand, in the current market demand is still at low levels and few bookings have been concluded by domestic buyers. In this general context, a fluctuating trend has lately been observed in the Chinese cold rolled market. Due to the imbalance between supply and demand, market prices are not expected to climb up further in the near term.

During the week in question Chinese cold rolled inventory continued its minor increasing trend. As of September 18, cold rolled inventory in the Shanghai market stood at 334,400 mt, up 3,000 mt from the previous week.

On September 14, Chinese steel producer Anshan Steel issued its October prices for several products. Accordingly, the producer's CRC price has decreased by RMB 480/mt ($70/mt). Thus, ST12 1.0 mm cold rolled sheet is now offered by the company at the level of RMB 4,290/mt ($629/mt).

Meanwhile, on September 16, local steelmaker Baotou Steel announced its October prices, reducing its CRC price by RMB 600/mt ($88/mt). As a result, this producer's SPCC 1.0 mm CRC products are now priced at RMB 4,850/mt ($711/mt).

On the same day, Shougang Steel has also informed customers that it was cutting its CRC product prices by RMB 650/mt ($81/mt). With this price adjustment, ex-Shougang Steel SPCC 1.0 mm CRC prices now stand at RMB 4,820/mt ($707/mt).

All abovementioned prices are ex-mill and excluding 17 percent VAT.

According to the national steel output data, in August Chinese cold rolled output reached 3.4742 million mt, up 0.3 percent month on month, registering an increase of 11 percent as compared with the corresponding month of last year. In August this year, the average daily output of cold rolled products reached a new historical high of 112,000 mt, recording a month-on-month growth of 0.26 percent. Faced with continuously growing supplies, market players will have to move with greater caution.

As domestic steel mills continue to operate at high capacity, the overall price trend is expected to move in a downward direction in the coming period.


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