Most mills in the Chinese domestic market cut their HRC prices by RMB 20-60/mt ($3-9/mt). The mills indicate a lack of confidence in the future of the market. In addition, they have been reducing their inventory levels, and this has had negative impact on the HRC spot market. After the May Day holiday, purchasing activity in the downstream market has decreased further.
If the prices in the HRC market keep falling, domestic mills will reduce output due to the narrowing of their profit margins. It is expected that HRC prices in the Chinese market will continue to trend down in the coming week amid the ongoing slackness of demand.