Ex-China offer prices of cold rolled coil (CRC) have edged up further amid the rising local CRC prices in China due to the expectation for production restrictions, while trading has been extremely low and many mills have even stopped offering as expected changes in the export tax policy have brought more uncertainties again.
At present, export offers for CRC given by major Chinese mills are at $980-1,100/mt FOB for September shipment amid the rising local CRC prices, with the average offer prices $10/mt higher than that recorded on July 21, while steelmakers have been cautious in giving export offers. The tradable price is hardly above $950-960/mt FOB, taking into account weak demand.
At the moment, market participants are waiting for the announcement from the government for the export tax rebate for CRC and HDG, which is still at 13 percent, but could be significantly cut or even removed from August 1, according to sources.
Moreover, “Concerns about the possible export tax continued among market players, while production restrictions bolstered CRC prices to some extent,” an international trader told SteelOrbis.
During the given week, domestic CRC prices in China have edged up slightly amid the fluctuating trend in HRC futures prices and shrinking supply of CRC to the spot market. The demand for CRC has been sluggish in current offseason, resulting in bearish sentiments among market players. It is expected that CRC prices in the Chinese domestic market will likely move sideways in the coming week.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 6,443/mt ($992.3/mt) ex-warehouse, moving up by RMB 37/mt ($5.7/mt) compared to July 21, according to SteelOrbis’ information.
As of July 28, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,879/mt ($905/mt), decreasing by RMB 39/mt ($6.0/mt) or 0.66 percent since July 21.
$1 = RMB 6.4929
