In face of the continuous rise seen in the domestic hot rolled market, most Chinese mills made successive upward adjustments to their ex-factory prices during the past week, which has pushed the spot prices further up. Nevertheless, hot rolled inventories in all the leading markets continued to rise, plus the weak trading performance, thus many players seemed quite worried about the future market risk and some individual traders even began to cash in their materials.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
3,477 |
+54 |
510 |
HR |
2.75 mm x 1,250 mm |
Q235B |
3,620 |
+67 |
531 |
Last week, traders in the domestic hot rolled market posted two different views against the market, leading to the certain confusions over market quotations. Given the price hikes made by mills, most traders followed up to raise their prices for spot supplies; while others, worrying about the future risk, still maintained their prices unchanged so as to stimulate the sales.
Over the past two weeks, deals were mainly concluded between traders in various leading markets. Following the rapid increase in market prices, domestic market observed an obvious drop in actual trading volume and inquiries. In this case, some traders that offered their materials at relatively high levels have lowered their prices slightly. Generally speaking, most traders are now operating cautious so as to avoid the likely market risks in the future.
According to the latest statistics, hot rolled inventory in Shanghai on May 15 amounted to 800,000 mt, up 26,000 mt week on week.
On May 15, Angang announced an upward adjustment of RMB 360/mt ($53/mt) to its hot rolled prices for June, with the new price of 5.5 mm x 1,500 mm Q235 now at RMB 2,830/mt ($415/mt, tax-excluded). In addition, Laiwu Steel, Anyang Steel, Liuzhou Steel, Ningbo Steel, and Taishan Steel all have raised their hot rolled ex-factory prices in the past week by margins ranged from RMB 30/mt ($4/mt) to RMB 180/mt ($26/mt). As a result, HR ordering costs for June at various leading mills are generally above the level of RMB 3,300/mt ($484/mt).
Overall, it seems unlikely for the HR market prices to soar sharply in the future, and changes in the supply and demand relationship will be the determining factor for the future market development.