Ex-China CRC prices from mills have remained stable compared to the previous week. However, after tradable prices had dropped by around $10-15/mt at the end of last week as compared to offers at the beginning of the same week, this week the tradable level is reported to have remained stable at the lower levels amid the still slow global demand recovery.
At present, export offers for CRC given by major Chinese mills are at $635-640/mt FOB for October shipment, remaining stable compared to August 16. However, after the tradable level had decreased to $620-625/mt FOB from $635/mt FOB at the beginning of the same week, market insiders have reported the same levels this week. “Ex-China CRC is still offered in the Gulf region at around $660/mt CFR level, while in South America Chinese suppliers have been offering their CRC at around $660-680/mt CFR,” an international trader said, adding, “Global demand is still depressed”.
In the meantime, during the given week CRC prices in the Chinese domestic market have fluctuated within a limited range as demand has not indicated any significant improvement so far. On August 21, the People’s Bank of China (PBOC) cut the one-year loan prime rate (LPR) by 10 basis points to 3.45 percent, while keeping the five-year LPR stable at 4.2 percent, with the latter cut not as strong as market players had expected. However, demand for CRC is expected to improve in the near future as the traditional peak season is approaching. At the same time, crude steel production restrictions may reduce the supply to the market, which will provide some support for CRC prices.
“The slight rises in HRC futures prices have bolstered local CRC prices to a certain extent, while increasing iron ore prices have exerted a positive impact on the CRC market from the cost side,” a market insider told SteelOrbis.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 4,337/mt ($602/mt) ex-warehouse, increasing by RMB 10/mt ($1.4/mt) compared to August 16, according to SteelOrbis’ information.
As of August 23, HRC futures at Shanghai Futures Exchange are standing at RMB 3,937/mt ($547/mt), increasing by RMB 11/mt ($1.5/mt) or up by 0.3 percent since August 16.
$1 = RMB 7.1988