China's domestic hot rolled market has continued to move up on a fluctuating trend over the past week. With price hikes successively announced by various leading mills, costs continue to the main factor providing support for hot rolled market prices. Meanwhile, due to traders' contrasting expectations as regards the future, the market has posted a certain amount of confusion over quotations.
On June 8, China's Ministry of Finance issued an announcement hiking the export rebate rate from zero percent to nine percent for hot rolled products. Many exporters believe that the new rebate rate will help stimulate the export market and boost market confidence.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
3,510 |
+13 |
514 |
HR |
2.75 mm x 1,250 mm |
Q235B |
3,690 |
+23 |
540 |
As a result of successive arrivals from the mills during the past week, the situation as regards supply shortages has gained considerable relief. Since hopes for an increase in market demand have been disappointed, the ascending movement of hot rolled prices has come under obvious pressure over the past week. Given the expectation that ordering costs of new materials will climb higher in the future, most traders have been reluctant to sell at low price levels in recent days.
Currently, market traders differ greatly on the issue of the likely future development of the market. Most traders are cautiously optimistic as regards the future, thinking that despite the soft market performance there is not much room for downward movement in the future market given the government's stimulus policy and production costs. However, some traders are more pessimistic in consideration of the high inventory levels and the continuing bearish demand. In this context, hot rolled prices in China's domestic market are expected to move on a fluctuating trend over the coming week.
According to the latest statistics, hot rolled inventory in Shanghai amounted to 790,000 mt on June 5, down 4,000 mt week on week.
On June 2, Shagang released its new price list for June, with the new price for 5.75 mm Q235 now at RMB 3,500/mt ($512/mt).
Rizhao Steel hiked its HRC prices by RMB 70/mt ($10/mt), with its new price for 4.75 mm Q235 HRC now at RMB 3,323/mt ($487/mt).
Meanwhile, Hebei Steel Group announced an upward adjustment of RMB 30/mt ($4/mt) to its hot rolled prices. Thus, the producer's new price of 5.75 mm Q235 is now at RMB 3,430/mt ($502/mt).
On June 4, WISCO raised its ex-factory HRC prices by RMB 260/mt ($38/mt) for July. Following the adjustment, the price of 2.75 mm Q235 HRC is at RMB 3,560/mt ($521/mt), while that of 5.5 mm Q235 HRC is at RMB 3,500/mt ($512/mt).
Apart from WISCO's prices, all the above prices from the other Chinese mills include 17 percent VAT.