Ex-China offer prices of cold rolled coil (CRC) have moved sideways in the past week following the Labor Day holiday. However, the workable level for Chinese material has increased somewhat recently amid higher demand for CRC in the local market, which supported overall sentiment in the market.
At present, export offers for CRC given by major Chinese mills are at $450-460/mt FOB for late July, moving sideways compared to May. The reference deal price was closer to $450/mt FOB in Southeast Asia and South America, versus $440-450/mt FOB last week. The rising trend in the local market amid quite good demand and rises seen in ferrous metal futures prices has made steelmakers unwilling to negotiate at lower prices with overseas customers.
During the given week, CRC producers lowered their capacity utilization rates, exerting a positive impact on CRC prices due to the decreased supply. Meanwhile, traders have been more willing to conclude purchases for CRC amid the improved market situation, and this has also bolstered CRC prices. At the same time, inventory of CRC has returned to normal levels, with some CRC products even being in short supply. It is expected that CRC prices in the Chinese domestic market will edge up slightly in the coming week.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 3,793/mt ($535.2/mt) ex-warehouse, up RMB 113/mt ($16.0/mt) compared to May 6, according to SteelOrbis’ information.
As of May 13, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,337/mt ($459.4/mt), increasing by RMB 89/mt ($12.6/mt) or 2.74 percent since May 6.
$1 = RMB 7.0875
