Over the past week (August 19-26) the Chinese cold rolled market has continued its downward trend of the previous week, but at a slower pace. On the inventory side, the cold rolled inventory levels in the leading regional markets have been rising due to slackening demand, thus bringing significant pressure to bear on the current market.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) |
1.0 mm x 1,250 x C | SPCC | 4,983 | -84 | 730 | |
CRS | 1.0 mm x 1,250 x 2,500 | SPCC | 5,070 | -90 | 742 |
At the beginning of the past week, prices in China's cold rolled market went down continuously. In spite of the latest price hikes of around RMB 250-300/mt ($37-44/mt) announced by domestic steelmakers Anshan Steel and Benxi Steel, market players have been more cautious and are maintaining a wait-and-see policy. For now, ready stock prices are clearly below those of materials due to arrive in the coming period. On August 24, the leading cold rolled markets in China indicated a temporary turnaround, mainly due to the dramatic price increases in the steel futures market, as well as due to the firming up of construction steel and hot rolled coil prices. Although this brief uptrend has to some extent alleviated the panic among cold rolled traders, the continuing gap between supply and demand is expected to lead to a further downward movement in the market.
Sales activities are observed to have waned in the past week as end-users are now more anxious about the fluctuations in the market. Meanwhile, the price hikes mentioned above have yet to result in any positive effect on the market. Mills' shipments have recently increased, with market inventories consequently increasing. It is reported that some traders are eager to sell off inventories in order to boost their cash flow, thus causing some confusion in market prices.
On the inventory side, during the week in question overall inventory in the main markets has indicated a rise, especially in the southern and in the eastern districts. As of August 26, cold rolled inventory in the Shanghai market stood at around 319,000 mt, an increase of 4,000 mt compared with the week ended August 14.
In general, despite the continuous increase of market inventory levels, any big decrease in prices is not expected in the coming period since overall inventory has not reached excessive levels. China's cold rolled market is expected to move on a slightly decreasing trend during the coming week.