Ex-China offer prices of cold rolled coil (CRC) have moved sideways in the past week, following the increase seen in the previous week. Some declines in the local market and losses in HRC futures prices over the past week have affected sentiments. Most exporters have not been active in the CRC export market, focusing either on HRC sales or on the local market due to the remaining uncertainty regarding the anticipated tax rebate cut.
At present, export offers for CRC given by major Chinese mills are at $880-900/mt FOB for June shipment, with average offer prices moving sideways on average compared to April 7, while buyers have to bear all risks of the potential tax rebate cut. The tradable value is at about $880/mt FOB, sources have said, but trading has been limited as rumors said the new tax rebate policy will be effective as of May 1. According to the preliminary expectations, the current tax rebate for CRC of 13 percent may be lowered to four percent, but some sources said that it is still unclear and a smaller reduction to just nine percent is also possible.
“Insiders in the market have said the new tax rebate policy will be effective as of May, while most steelmakers have stopped giving export offer prices for CRC,” an international trader told SteelOrbis.
During the given week, HRC futures prices moved down first, negatively affecting CRC prices in the spot market, while they started to recover later. Downstream users have mostly held a wait-and-see stance following the previous rises in CRC prices, though relatively low inventories have provided support for prices.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 5,976/mt ($911/mt) ex-warehouse, moving down by RMB 66/mt ($10/mt) compared to April 7, according to SteelOrbis’ information.
As of April 14, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,418/mt ($829/mt), up by RMB 66/mt ($10/mt) compared to the previous day.
$1 = RMB 6.5362