Over the past week China's domestic hot rolled market mainly followed the example of the steel futures market, moving up on a fluctuating trend. Currently, profit margins for traders have decreased and so traders have started to show greater caution as regards market activity.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
3,653 |
+110 |
536 |
HR |
2.75 mm x 1,250 mm |
Q235B |
3,800 |
+80 |
557 |
Influenced by the steel futures market, spot prices of hot rolled coils in the domestic market have in recent days indicated frequent fluctuations though the general price trend has been in an upward direction. With the gap between mills' ex-factory prices and market prices gradually decreasing, traders with no cash flow problems were not eager to conclude deals and so their sales volumes remained at normal levels during the past week. Meanwhile, end-side users have generally been purchasing only according to their needs, with no intention of stockpiling material, and consequently actual market demand has been quite low.
Hot rolled inventory in China's leading markets has climbed up again in the past week. According to the latest figures, total hot rolled inventory in China's leading markets stands at 3.8172 million mt, up 24,720 mt week on week. Moreover, hot rolled inventory in Shanghai amounted to 1.30456 million mt on November 5, up 15,620 mt compared with the level on October 30. In recent days, hot rolled inventory in Shanghai has consistently been moving in an upward direction, thereby exerting a certain degree of pressure on traders. It is believed that the current steel market still faces great difficulties from high outputs, elevated inventory and low demand against the background of a lack of change in the supply-and-demand relationship.
To sum up, profit margins have gradually decreased for traders as a result of the growing costs of materials, and so traders have appeared more cautious in their approach to market trading activity in recent days. On the other hand, since no release of market demand has followed the increase of prices, there has been an obvious weakening of the rising momentum of the market. Generally speaking, the Chinese hot rolled market is expected to fluctuate within a small range in the coming week.