Ex-China cold rolled coil (CRC) prices have remained relatively stable from mills over the past week supported by slight rises in local CRC prices and in HRC futures prices. However, tradable prices continue to show a downward bias, and more discounted non-VAT CRC offers have been emerging in the market.
More specifically, ex-China CRC offer prices from mills have been voiced at $530-555/mt FOB this week, remaining stable on average week on week, while the tradable levels for ex-China CRC have been heard at $515-530/mt FOB, versus $520-535/mt FOB last week.
At the same time, although trade activity has remained relatively slow globally, market insiders have reported several deals for ex-China CRC signed at $515/mt FOB in Southeast Asia and South America this week. Besides, talk about transactions signed for non-VAT CRC at even lower prices or at around $510/mt FOB and below in Southeast Asia and the Middle East has also been circulating in the market.
During the given period, HRC futures prices have seen a slightly increasing trend, exerting a positive impact on CRC prices. Demand for CRC has been slack during the traditional cold winter offseason, weakening the support for prices. CRC producers have been unwilling to reduce the production capacity utilization rates given their sufficient profitability. Meanwhile, the auto industry will likely increase sales volumes up to the end of the year, which will help boost demand for CRC. Moreover, market players expect stimulus policies from the government, boosting sentiments in the CRC market.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 3,547/mt ($501/mt) ex-warehouse, increasing by RMB 10/mt ($1.4/mt) week on week, according to SteelOrbis’ information.
As of December 3, HRC futures at Shanghai Futures Exchange are standing at RMB 3,319/mt ($469/mt), increasing by RMB 15/mt ($2.1/mt) or 0.45 percent since November 26, while decreasing by 0.18 percent compared to the previous trading day, December 2.
$1 = RMB 7.0754
