Continuing its upward fluctuating trend of the previous week, in the past week China's domestic hot rolled market first saw some confusion over market quotations before jumping up considerably under the influence of the big hike announced by Baosteel for its July HRC prices. Meanwhile, market inventory levels recorded a mixed performance, with an obvious increase seen in eastern China and a drop in the north.
Product name |
Specification |
Category |
Average price(RMB/mt) |
Weekly change (RMB/mt) |
Price($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
3,617 |
+107 |
530 |
HR |
2.75 mm x 1,250 mm |
Q235B |
3,777 |
+87 |
553 |
In eastern and southern China, stimulated by Baosteel's price adjustment, traders in the market have been bullish as regards the prospects for the future and thus have preferred to hold on to their stocks. However, as a result of the price increase, trading activities became weak at the higher price levels. Moreover, the climbing market inventory levels also brought a certain amount of pressure to bear on the market. According to the latest statistics, hot rolled inventory in Shanghai amounted to 820,000 mt on June 12, up 28,000 mt week on week. As regards the northern regions, the trading volume shrunk considerably when hot rolled prices climbed to the level of RMB 3,550/mt ($520/mt).
On June 11, Baosteel issued its price policy for July, with an upward adjustment of RMB 400/mt ($59/mt) made to hot rolled prices. As a result, the new price of 5.75 mm x 1,250 mm x C SS400 is now at RMB 3,592/mt ($526/mt), while that of 2.0 mm x 1,250 mm x C SPHC stands at RMB 3,992/mt ($584/mt). The above prices exclude 17 percent VAT.
On June 10, Jinan Steel hiked its HRC prices by RMB 60/mt ($9/mt), with its new price for 4.75 mm Q235 HRC now at RMB 3,740/mt ($548/mt). This price includes 17 percent VAT.
Overall, the price rise in the Chinese hot rolled market over the past week was mainly due to Baosteel's latest price hike. Thus, without the follow-up of market demand, commercial activities have seemed quite slack. Considering the current growth of market supplies, sales are expected to face more pressure in the future and it will be hard for prices to go up further.