Demand for ex-China cold rolled coil (CRC) has improved over the past week ending on April 21. Offer prices have mainly moved sideways amid decreasing local CRC prices and the pending tax rebate cut issue.
At present, export offers for CRC given by major Chinese mills are at $880-900/mt FOB for June shipment, with the average offer prices moving sideways on average compared to April 14, while buyers need to bear all risks relating to the anticipated tax rebate cut. Deals have been reported in this range, while last week the workable level was not above $880/mt FOB.
“Following their wait-and-see stance, overseas buyers have started to conclude purchases of ex-China CRC, resulting in better transaction activities this week,” an international trader told SteelOrbis.
During the given week, local CRC prices have moved on a downward trend amid the corrections seen in HRC futures prices in China during most of the week and the statement by China’s Ministry of Industry and Information Technology (MIIT) regarding the rises in commodity prices. Downstream users have been unwilling to conclude purchases, though relatively low inventories have provided some support for CRC prices.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 5,910/mt ($909/mt) ex-warehouse, moving down by RMB 66/mt ($10/mt) compared to April 14, according to SteelOrbis’ information.
As of April 21, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,484/mt ($843/mt), increasing by RMB 66/mt ($10/mt) or 1.22 percent since April 14. Though sentiment has been weak and futures prices have declined gradually during most of the past week, the higher week-on-week level is due to the strong hike of RMB 91/mt ($14/mt) recorded today, April 21.
$1 = RMB 6.5046