Chinese CRC market indicates strength amid global economic uncertainty

During the week ending August 17, prices of cold rolled steel products in China have trended up, amid a recovery in market confidence. As of August 17, the average cold rolled coil prices in the main markets in China are as follows:

As of August 17, the prices of ST12 1.0 mm x 1,250 mm x C cold rolled coil in the Shanghai, Tianjin and Lecong markets are respectively at RMB 5,380/mt ($843/mt), RMB 5,380/mt ($843/mt) and RMB 5,580/mt ($875/mt). Meanwhile, the sales prices of ST12 1.0 mm x 1,250 mm x 2,500 mm cold rolled coil in these markets are respectively at RMB 5,450/mt ($854/mt), RMB 5,470/mt ($857/mt) and RMB 5,660/mt ($887/mt). All the prices above include 17 percent VAT ($1 = RMB 6.38).

CRC inventory in the Chinese market has decreased slightly. As of August 12, the total CRC inventory in the domestic market amounted to 1.60 million mt, down 26,320 mt from the previous week. On the same date in the Shanghai market, inventory of CRC products stood at 565,790 mt, declining by 2,400 mt week on week.

Amid the current global economic turmoil, different pricing trends have appeared in the Chinese steel markets. Thanks to the increase in raw material prices and the anticipation of domestic mills' higher offers, Chinese CRC prices started a tentative upward movement in the past week. In addition, due to the slight decrease in market inventory and the approaching peak season for steel product demand, traders are quite positive on the prospects for the future market.

On the whole, higher production costs and declining inventories have contributed to the rising trend in the domestic CRC market. The future pricing trend of Chinese CRC prices depends on whether the downstream buyers can accept higher production costs. It is expected that the Chinese cold rolled coil market will continue its rising trend in the coming week.