During the week ending June 27, the Chinese domestic cold rolled coil (CRC) market has maintained its downward trend. Average CRC prices in the main markets in China can be viewed in the SteelOrbis price reports section.
Very low transaction activity has been witnessed in the Chinese CRC market in the past week. Sluggish end-user demand is a major factor contributing to the decline in CRC prices, while successive decreases in hot rolled coil (HRC) prices also mean less support for CRC prices. Meanwhile, inventories have increased at steel mills, while traders have lowered their offers to reduce inventory pressure and to bring in funds as the end of the month approaches. Profit margins in the Chinese CRC market have also been contracting, increasing pessimism among traders.
In May of the current year, total output of CRC in China amounted to 5.307 million mt, up 1.6 percent compared with last month and rising by 11.6 percent on year-on-year basis. However, CRC market demand has not shown any sign of recovery. In May, automotive vehicle output in China was 1,570,900 units, down 4.66 percent month on month, while automotive vehicle sales amounted to 1,607,200 units, with a decrease of 1.06 percent month on month.
Given the disparity between supply and demand, it is expected that the Chinese CRC market will indicate a further softening in the coming week.