Local Chinese CRC market softens further, price rebound unlikely in near term

While Chinese domestic CRC product prices have remained on a downtrend, there has not been any recovery in the ordering activity amid deteriorating market sentiment. After three consecutive months of downward movement which started in February, domestic CRC market prices are now close to the bottom levels recorded in 2012. Given the various negative factors in the market, there is no chance of steel prices rebounding in the short term. Firstly, Chinese steel mills have not yet implemented cuts in output. Secondly, the slight expansion of downstream demand is unlikely to counterbalance the high supply levels. Finally, expectations of further decreases are now more widespread in view of lower ex-mill prices. On the whole, Chinese domestic CRC prices are not expected to witness any improvement in the near term.