During the past week the Chinese hot rolled coil (HRC) market has fluctuated in a downward direction, while inventory in the major Chinese markets has continued to increase. Market demand is not good and this is reflected in a poor transaction situation. Traders are cautious as regards the future market.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
4,297 |
-90 |
642 |
HR |
2.75 mm x 1,250 mm |
Q235B |
4,427 |
-93 |
662 |
On September 21, Q235/S400 5.75 mm hot rolled coil (HRC) prices stand at RMB 4,240/mt ($634/mt), RMB 4,300/mt ($643/mt) and RMB 4,350/mt ($650/mt) respectively in the Shanghai, Tianjin and Lecong markets. In addition, Q235 2.75 mm HRC stands at RMB 4,380/mt ($655/mt), RMB 4,380/mt ($655/mt) and RMB 4,520/mt ($676/mt) respectively in the abovementioned markets. All the above prices include 17 percent VAT (US$1 = RMB 6.69).
At the beginning of the past week, domestic steel futures prices increased, major steelmakers published new price lists and Chinese domestic HRC spot market prices increased. However, the rising trend did not last long. As demand declined, buyers decided to adopt a wait-and-see policy. Also, most transactions were between traders. End-users bought only according to their needs and so the general delivery situation was not good. Confidence levels in the market dropped and prices started to fall. Generally speaking, the supply-demand situation has been the principal factor exerting downward influence on Chinese HRC prices. Many traders consider that there is a lack of support for the upward movement of prices and that the domestic HRC market may trend sideways for a period.
In general, inventory in the major Chinese markets has increased slightly. On September 21, aggregate inventory in the main Chinese cities was 4.5739 million mt, up 61,700 mt week on week. The region with the greatest increase was the eastern Chinese market. On September 21, inventory in Shanghai was 1,830,010 mt, down 10,070 mt week on week.
Generally speaking, as the National Day holiday approaches, transaction activity is getting slacker. In addition, as the stock market and the steel futures market will stop work over the holiday period, it is expected that the Chinese hot rolled coil (HRC) market will follow a neutral trend before the holiday.