Chinese cold rolled market trends sideways

Over the past week (September 9-16) the Chinese cold rolled market has been characterized by a stable trend, with no big changes in prices. Meanwhile, a slight increase has been registered in inventory levels.

Against the background of slackened trading activity, some mills in China have started to reduce their cold rolled prices and to compensate traders who previously signed purchase contracts with them. In spite of this, traders still face great pressure.

During the week in question, domestic sales prices of cold rolled coils have remained at relatively stable levels. On the one hand, demand in the downstream industries is too poor to cause an increase in prices. On the other hand, the uptrend of raw material prices has to some extent helped to prevent any big decline in cold rolled prices. As certain traders have stated, despite some improvement in business, demand levels are not high enough to push up prices. However, other traders complain of sluggish market activities and of chaos in market prices.

As of September 10, cold rolled inventory in the Shanghai market amounted to 331,000 mt, up 4,000 mt from the previous week. The overall inventory level in the Chinese cold rolled market has indicated a slight increase this week.

According to the statistics from the China Automobile Industry Association, in August, China achieved a total automobile output of 1.1407 million units and total sales of 1.1385 million units, registering respective increases of 2.62 percent and 4.71 percent from the previous month, or 86.10 percent and 81.68 percent year on year.

With the support of the government's policies, demand from end-users has been indicating positive signals, especially in the automobile and white goods industries. Compared with the local hot rolled market, inventory pressure in China's cold rolled market is smaller.

For the coming week it is expected that cold rolled prices in the local Chinese market will trend downwards.