During the past week, the Chinese hot rolled coil (HRC) market registered some slight downward fluctuations.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
4,820 |
-43 |
736 |
-7 |
HR |
2.75 mm x 1,250 mm |
Q235B |
4,927 |
-3 |
752 |
-0.45 |
On April 19, Q235/S400 5.75 mm hot rolled coil (HRC) prices stand at RMB 4,780/mt ($730/mt), RMB 4,780/mt ($730/mt) and RMB 4,900/mt ($748/mt) respectively in the Shanghai, Tianjin and Lecong markets. In addition, Q235 2.75 mm HRC stands at RMB 4,940/mt ($754/mt), RMB 4,840/mt ($739/mt) and RMB 5,000/mt ($763/mt) respectively in the abovementioned markets. All the above prices include 17 percent VAT (US$1 = RMB 6.55).
The news that China's central bank will up the deposit reserve ratio from April 21 has increased the prevalence of the wait-and-see attitude among domestic traders, and has thus negatively affected the hot rolled market. At the same time, in order to stimulate deliveries, some traders have been giving discounts of about RMB 10-20/mt ($1.53-3.05/mt).
On April 15, aggregate inventory of hot rolled products in China's major cities was at the level of 4,642,880 mt, down 60,390 mt week on week, registering the fifth consecutive week-on-week decline. However, inventory in Shanghai saw its first increase in four weeks, now at 1,644,710 mt, up 600 mt week on week.
Regarding HRC prices in the coming period, there are many uncertainties in the market, due to the gradual decrease in transaction volumes after the recent price increase. In addition, because of the increased deposit reserve ratio, some medium and small-sized enterprises currently face difficulties in obtaining loans and so are facing financial pressure. In the meantime, the sluggish demand from end-users causes traders to be cautious about purchasing.
For the coming week, it is hard to see any significant upward or downward movements in the market. Availability of funds and the state of demand will be among the most pressing issues in the market.