Chinese HRC market price follows uptrend after May Day holiday

In the past week China's domestic HRC market has followed an upward trend. After the May Day holiday, price have seen an obvious increase. The cost factor is providing powerful support for Chinese HRC market prices.

After the holiday, the Chinese HRC market started to increase, with the general transaction situation improving. In the Tianjin market, purchasers expect to buy at prices below the mainstream price, but many traders consider there is still space for increase and so they are not willing to compromise. Local buyers and sellers are negotiating so the general transaction situation is not good. In the Lecong market, during the holiday HRC deliveries were normal and inventory has not registered any obvious increase, while the market price has shown a small uptick. As to the future trend in the Lecong market, many traders considers the price is supported by costs and thus that there is little possibility of prices going down again.

In the past week, Chinese steelmakers' price adjustments indicated increases and also decreases. Taishan Steel increased its HRC prices by RMB 200/mt ($29/mt), and so its present Q 235 5.75 mm ex-mill price is RMB 4,900/mt ($718/mt). Shandong Iron and Steel Group's HRC price increased by RMB 150/mt ($22/mt), with its present Q235 5.75 mm ex-mill price at RMB 4,860/mt ($713/mt). Rizhao Steel decreased its HRC price by RMB 50/mt ($7/mt), and so its Q235 5.75 mm ex-mill price is now at RMB 4,513/mt ($662/mt).

On April 30, HRC inventory in the Shanghai market stood at 1.7386 million mt, down 2,524 mt week on week.

Generally speaking, the current Chinese steel market faces high costs of raw materials and an unstable international economy, and also the Chinese government's policies aimed at controlling inflation. There are many uncertainties in the market, and so further observation is required for the future market trend.