Ex-China offer prices of cold rolled coil (CRC) have indicated big rises amid increasing local CRC prices, rising HRC futures prices and the overall stable demand enjoyed by Chinese mills. But, while the news of the export tax rebate cut from 13 percent to zero for most exported steel production has been announced today, CRC and HDG coils have not been included in the list of affected products.
At present, export offers for CRC given by major Chinese mills are at $940-1,000/mt FOB for June shipment, with the average offer prices rising by $80/mt compared to April 21. The tradable level has increased as well, by $30/mt from last week to $910/mt FOB or even slightly above, with this level corresponding to the latest deals in which buyers accepted all risks of a tax rebate cut. Though the rebate rate has stayed at 13 percent for CRC and HDG for now, traders believe the government may announce a reduction to four percent later.
“The tax rebate cut policy (effective as of May 1) has finally been issued, causing some market players to stop giving offer prices at the current stage, though firm demand in the local market in the coming period will provide support for ex-China CRC prices,” an international trader told SteelOrbis.
During the given week, HRC futures prices in China have indicated big rises, exerting a positive impact on CRC prices, while downstream users have started to be cautious as regards concluding purchases at the current high price levels. Inventories of CRC have been at a relatively low level, bolstering prices. Since the Labor Day holiday (May 1-5) is approaching, it is expected that CRC prices in the Chinese domestic market will move sideways in the coming week.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 6,126/mt ($944.6/mt) ex-warehouse, moving up by RMB 216/mt ($33.3/mt) compared to April 21, according to SteelOrbis’ information.
As of April 28, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,691/mt ($877.5/mt), increasing by RMB 207/mt ($32/mt) or 3.8 percent since April 21.
$1 = RMB 6.4853
