Over the past week China's domestic hot rolled market registered a mixed performance in the various regions against the background of strong inventory pressure.
Product name |
Specification |
Category |
Average price(RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
3,333 |
-17 |
488 |
HR |
2.75 mm x 1,250 mm |
Q235B |
3,527 |
-30 |
516 |
At the beginning of the past week, the eastern China market bounced up under the influence of market rumors that the government would move to raise the export rebate rate. However, without enough support from market demand, hot rolled prices registered a rapid drop in midweek. As regards the other regions, market prices remained stable before declining in response to the news that China's February steel exports had hit their lowest level of the previous 52 months.
On account of the relatively high inventory levels, most traders are still cautious about the prospects for the future. Industry insiders think that the market will continue its fluctuations at bottom levels given the current imbalanced supply-and-demand situation. According to the latest data, hot rolled inventory in Shanghai currently amounts to 784,400 mt, down 11,410 mt week on week.
Last week, various hot rolled producers continued to lower their ex-factory prices by margins ranging from RMB 50/mt ($7/mt) to RMB 550/mt ($81/mt).
Magang cut its prices from early March levels by RMB 300/mt ($44/mt), with the settlement price for 5.5 mm x 1,800 mm material declining to RMB 3,469/mt ($508/mt).
Hebei Steel Group made a downward adjustment of RMB 250/mt ($37/mt) to its HRC prices, with the new price of 5.5 mm at RMB 3,400/mt ($498/mt).
Ningbo Steel reduced its price of 5.5 mm common carbon coils to RMB 3,350/mt ($491/mt).
Jinan Steel cut its HRC prices by RMB 170/mt ($25/mt), with its new HRC prices now standing at RMB 3,730/mt ($546/mt), which is still higher compared with the other mills' prices.
On March 16, Angang and Baotou Steel announced respective downward adjustments of RMB 550/mt ($81/mt) and RMB 500/mt ($73/mt) to their April prices, with their hot rolled coils now being offered at RMB 2,730/mt ($400/mt) and RMB 3,400/mt ($498/mt) respectively.
Except for the prices of Angang and Magang, all the other prices include 17 percent VAT.
The Chinese hot rolled export market still posted a stagnant trend over the past week, while the import market was defined by sluggishness. At present, export quotations of hot rolled products from South Korean steelmaker POSCO are around $390-400/mt CFR, while hot rolled coils from Taiwan-based Zhonghong are offered at $390/mt CFR. Meanwhile, export offers of leading Indian mills are also standing at $390/mt CFR, and CIS hot rolled coils are being sold at around $380/mt CFR in the export market. Currently, most Chinese traders are still showing caution as regards importation of hot rolled coils, leading to the slackness of the trading performance.
According to the latest statistics released by the customs authorities, China's HR coil export volume in January stood at 219,300 mt, down 442,700 mt or 66.88 percent year on year, totaling a value of $164 million, down $292 million or 64.07 percent compared with the same period last year. The average export price was $747.78/mt.
HR coil imports in January came to 186,000 mt, up 16,100 mt or 9.49 percent year on year, totaling a value of $131 million, down $36 million or 21.68 percent compared with the same month last year. The average HR coil import price was $704.21/mt.