The Chinese hot rolled market declined on a fluctuating trend over the past week, with most traders still in standoff mode. Meanwhile, mills have made further downward adjustments to their prices, which are now closing in on the level of RMB 3,300/mt ($483/mt). According to China's latest export rebate adjustment, the rebate rate for HRC remains at zero.
Product name |
Specification |
Category |
Average price(RMB/mt) |
Weekly change (RMB/mt) |
Price($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
3,317 |
-26 |
486 |
HR |
2.75 mm x 1,250 mm |
Q235B |
3,443 |
-67 |
504 |
Last week, China's domestic hot rolled market posted an overall downward movement on a fluctuating trend, with the prices of 5.75 mm HRC in respective ranges of RMB 3,280-3,300/mt ($480-483/mt), RMB 3,250-3,280/mt ($476-480/mt) and RMB 3,400-3,450/mt ($498-505/mt) in Shanghai, Tianjin and Lecong. Meanwhile, there were also some individual traders selling materials at levels RMB 50/mt ($7/mt) lower than the market prices, and this caused some confusion over market quotations. However, considering mills' cost factor, most traders have been unwilling to reduce their prices, since, the bigger the decrease, the greater the losses they would suffer.
According to the latest statistics, hot rolled inventory in Shanghai amounted to 790,000 mt on March 28, up 3,000 mt week on week. Meanwhile, hot rolled inventory in Tianjin has registered a decline of 3,000 to 190,000 mt, with inventory in Guangzhou reaching 640,000 mt, up 22,000 mt week on week.
For the purpose of stimulating sales, Chinese mills continued to lower their ex-factory prices of hot rolled products, by margins ranging from RMB 50/mt ($7/mt) to RMB 560/mt ($82/mt). Following the adjustments, ex-factory prices of 5.5 mm x 1,500 mm x C Q235/SS400 have gradually approached the market levels, some of which have even dropped below RMB 3,300/mt ($483/mt). Although the continuous decrease in ex-factory prices may help relieve the losses suffered by traders to a certain extent, it also exacerbates the pessimistic mood as regards the prospects for the future market.
Export quotations of Chinese HRC remained on a declining trend over the past week, but still look unattractive; meanwhile, the import market has observed relatively positive levels of commercial activity in recent days. At present, the mainstream export quotations of HRC from China's leading mills are around $460/mt FOB, with some low offers of $425-430/mt CFR South Korea seen in the market. On the other hand, import prices from South Korean producer POSCO to China have remained at $410-420/mt CFR, with quotations for materials from Russian steelmaker MMK at around $380-385/mt CFR.
According to the detailed information regarding the export rebate adjustment released on March 27 by China's Ministry of Finance, the export rebate rate for hot rolled products remains at zero. Consequently, most mills and traders seem to hold out little hope for the future of China's HRC exports.