Over the past week (August 26-September 2), the Chinese cold rolled market has continued its downtrend of the previous week, while at the same time a slight increase has been observed in overall inventory in the main markets of China. Meanwhile, domestic steel traders currently lack confidence, as is evident from the caution they show in their purchasing activities.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
1.0 mm x 1,250 x C |
SPCC |
4,840 |
-143 |
709 |
|
CRS |
1.0 mm x 1,250 x 2,500 |
SPCC |
4,940 |
-130 |
723 |
With domestic HRC prices plummeting sharply, the gap between CRC and HRC prices in China has widened. Some traders who are uncertain about the future market situation and fear a possible big drop in prices are currently willing to provide some discounts with the aim of finalizing orders. August production materials have recently been flowing into the market at RMB 200-300/mt ($29-44/mt) lower than the mills' ex-work prices. Against the background of slackening demand, increasing inventories and growing production levels in the cold rolled market, domestic traders are starting to have concerns about the traditionally busy season in September and October.
According to the latest census data, as of August 27 CRC inventory in Shanghai stood at around 322,000 mt, registering an increase of 3,000 mt week on week.
On the output side, in July Chinese domestic cold rolled output was 3.464 million mt, an increase of 15.24 percent year on year or 10.1 percent from June. The average daily output stood at 111,700 mt, up 6.5 percent month on month.
The current prices of CRC in the Chinese market have already dropped to the levels of the second half of July. There is little chance of traders being in a hurry to sell stocks, given that this would necessarily lead to a sharper drop in prices. As for the coming week, prices will probably continue to decline further.