Over the past week, the CRC transaction volume in the Chinese domestic market has improved significantly. Meanwhile, traders hold divergent views as regards the prospects for the local CRC market in the coming period.
After a downtrend lasting nearly one month, CRC prices in the domestic spot market are RMB 150/mt ($23/mt) lower than the booking prices for new materials, which would seem to indicate that CRC prices are at around bottom levels. For instance, the cost of 1.0 mm CRC delivered to Shanghai in March was RMB 5,050/mt ($806/mt), while the current transaction price in the spot market is at around RMB 4,750-4,800/mt ($758-766/mt). Meanwhile, CRC products in the current spot market mainly consist high-cost materials delivered in March, and so they provide strong support for CRC spot prices.
Many market participants are optimistic about the future as they think that CRC prices will likely move up from the bottom up due to improving demand and cost support. However, other insiders state that CRC prices may see further declines due to the ongoing overcapacity issue, the possibility of increased supplies arriving in the market in the near future, and the lack of measures by the central and local governments which would provide support for the steel industry.
Overall, it is thought that CRC prices in the Chinese domestic market will move sideways in the coming week.