Ex-China offer prices of cold rolled coil (CRC) have moved sideways in the past week even though demand has been relatively weak in both local and export markets, but the appreciation of the domestic currency has supported prices.
At present, export offers for CRC given by major Chinese mills are at $600-620/mt FOB, moving sideways on average compared to October 14, while reference deal prices have been at $595-605/mt FOB to South America and Southeast Asia.
At the same time, the exchange rate of the RMB to the US dollar has reached $1 = RMB 6.6781 on October 21, much stronger compared to the $1 = RMB 6.7473 rate a week ago. This has prevented export prices from moving down.
During the given week, demand for CRC has been sluggish, with bearish sentiments prevailing among market players. Inventories of CRC have not seen big changes amid the slack demand, though traders have been seeking to lower inventory to avoid potential risks.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 4,726/mt ($708/mt) ex-warehouse, remaining stable compared to October 14, according to SteelOrbis’ information.
As of October 21, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,788/mt ($567/mt), increasing by RMB 31/mt ($4.6/mt) or 0.8 percent since October 14.
$1 = RMB 6.6781
