During the week ending September 13, prices in the Chinese hot rolled coil (HRC) market have seen a slight downtrend amid slow activity. Meanwhile, most traders have little confidence in the prospects for the future market. As of September 13, the average hot rolled coil prices in the main markets in China are as follows:
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 |
4,807 |
-10 |
753 |
-2 |
HR |
2.75 mm x 1,250 mm |
Q235B |
4,890 |
-3 |
766 |
-0.4 |
As of September 13, the prices of Q235/S400 5.75 mm HRC in Shanghai, Tianjin and Lecong are respectively RMB 4,770/mt ($748mt), RMB 4,750/mt ($745/mt) and RMB 4,900/mt ($768/mt). For Q235 2.75 mm HRC, prices stand at RMB 4,860/mt ($762/mt), RMB 4,800/mt ($752/mt) and RMB 5,010/mt ($785/mt) in the abovementioned cities. All prices include 17 percent VAT ($1 = RMB 6.38).
As for inventory, in the main Chinese HRC market stocks have increased after the previous decrease. According to the data released by the China Iron and Steel Association, as of September 9 aggregate HRC inventory in the main Chinese markets totaled 4,349,460 mt, indicating an increase of 48,690 mt week on week, while HRC inventory in the Shanghai market on the same date totaled 1,563,680 mt, up 14,700 mt week on week.
Although the market has entered what is traditionally the peak season for demand, downstream demand remains modest. HRC prices are indicating a slight downtrend due to low demand, few transactions and high inventory. At the current time, most traders have little confidence in the future market
Baosteel issued its new price policy on September 13 for October shipments, with its prices of HR steel products increasing by RMB 60/mt ($9/mt). Accordingly, the base price of Baosteel's 5.5mm HRC has increased to RMB 4,812/mt ($754/mt), exclusive of 17 percent VAT. Market players have been expecting that the awaited price adjustment for Baosteel's HRC would support current market prices. However, low downstream demand has meant that traders prefer to monitor the market trend rather than conclude bookings.
Overall, the recovery of the Chinese HRC market will still depend on improvement of demand. The domestic HRC market is expected to follow a minor downtrend in the coming week.