During the past week, the Chinese cold rolled coil (CRC) market has maintained its weak trend, with market prices down slightly compared with the previous week. The average CRC prices in the main markets in China are as follows:
As of May 18, prices of ST12 1.0 mm × 1,250 mm × C CRC stand at RMB 5,520/mt ($845/mt), RMB 5,500/mt ($842/mt) and RMB 5,520/mt ($845/mt) respectively in the Shanghai, Tianjin and Lecong markets. In addition, prices of ST12 1.0 mm × 1,250 mm × 2,500 mm CRS stand at RMB 5,570/mt ($853/mt), RMB 5,600/mt ($858/mt) and RMB 5,560/mt ($851/mt) respectively in the Shanghai, Tianjin and Lecong markets. All the above prices include 17 percent VAT (US$1 = RMB 6.53).
On May 13, the aggregate inventory of cold rolled products in China was at 1,682,900 mt, up by 131,630 mt week on week. On the same date, inventory in Shanghai was 568,870 mt, up by 6,080 mt week on week.
In the past week, Chinese cold rolled coil market has maintained its previous weak trend. Market transactions are slow and traders are confused about the current situation. Shougang Group has announced its June prices, with the ex-works price of 1.0 mm x 1,250 mm x C material remaining at RMB 4,790/mt ($734/mt), unchanged compared with the prices for May. Accordingly, in the domestic market, based on the above price level the cost of the mentioned product (including freight and tax) is still higher than the current market price. However, in the past week, due to weak demand, market prices of the main cold rolled products have dropped down slightly week on week. According to feedback from traders, transaction volumes would increase significantly if quotations in the market fell by RMB 20/mt ($3/mt). However, traders are not inclined to cut their prices by that margin at the current time.
Affected by the Chinese central bank's tightened monetary policy, a shortage of funds has been observed in the downstream market, and traders also need to sell materials in order to bring in cash. Accordingly, in the current situation of oversupply, prices of cold rolled coils may maintain their trend weak in the short term.
For the coming week, the Chinese cold rolled coil market is expected to continue its soft trend, though prices will not drop by a large margin.