Due to bullish sentiments amid rising ex-China hot rolled coil (HRC) offer prices to which the appreciation of the Chinese currency has contributed, ex-China offer prices of cold rolled coil (CRC) have increased to $550-560/mt FOB, up $7.5/mt on average over the past week. At the same time, deals have been done at $545-550/mt FOB to the Middle East and Southeast Asia, supporting overall sentiments in the market.
During the given week, local CRC inventories have continued to rise due to the approaching Chinese New Year holiday. Shipments from steelmakers have increased, easing the supply shortage in the CRC market, and thus exerting a negative impact on CRC prices. Average 1.0 mm cold rolled coil spot prices in China have edged down by RMB 13/mt ($1.9/mt) week on week to RMB 4,423/mt ($642.4/mt) ex-warehouse, according to SteelOrbis’ information.
Major Chinese steelmaker Anshan Iron and Steel has raised its ex-works prices for CRC by RMB 50/mt ($7.3/mt) for delivery in February, providing support for CRC prices in the spot market, though Liaoning Province-based Benxi Iron and Steel has kept its prices for CRC stable for delivery in February. However, most market players will exit the market by the end of this week, which will negatively affect the CRC market.
As of January 15, HRC futures at the Shanghai Future Exchange are standing at RMB 3,575/mt ($519.2/mt), decreasing by RMB 68/mt ($9.9/mt) or 1.9 percent since January 8.
$1 = RMB 6.885