Ex-China offer prices of cold rolled coil (CRC) have indicated some declines amid the downtrend in local prices, decreasing HRC futures prices and cautious sentiments among market players. Buyers are mainly staying away from purchases, awaiting the announcement of lower export tax rebates.
At present, export offers for CRC given by major Chinese mills are at $940-960/mt FOB for July shipment, while buyers need to bear the potential risks of any adjustment of the export tax rebate, with the average offer prices decreasing by $20/mt on average compared to June 2. The tradable price level has been heard at not above $920/mt FOB at the moment.
“HRC futures prices decreased, exerting a negative impact on ex-China CRC, while rumors about the cancellation of the export tax rebate have made market players hold a wait-and-see stance as regards concluding purchases of CRC,” an international trader told SteelOrbis. Earlier, market sources were expecting a decrease in the current export tax rebate for CRC and HDG coils from 13 percent to four percent, but no announcement has been issued yet. According to market sources, a clearer export policy may be announced from June 15.
During the given week, HRC futures prices have moved down in China, negatively affecting CRC prices. Meanwhile, as the rainy season is approaching in eastern and southern China, demand for CRC has slackened. It is thought that CRC prices in the Chinese domestic market may fluctuate within a limited range in the coming week.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 6,163/mt ($964/mt) ex-warehouse, moving down by RMB 83/mt ($13/mt) compared to June 2, according to SteelOrbis’ information.
As of June 9, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,366/mt ($839/mt), rising by RMB 61/mt ($9.54/mt) or 1.15 percent since June 2, mainly owing to the increase seen today after the declines seen earlier this week.
$1 = RMB 6.3956
