Local Chinese HRC prices still rise though corrections seen in futures market

During the week ending November 15, average hot rolled coil (HRC) prices in the Chinese domestic market have indicated an upward trend, while transaction activity in the overall market has been at low-to-medium levels. Average HRC prices in the local Chinese market are presented in the following table.

During the given week, HRC prices have continued to indicate an overall upward trend, while transaction activities have been at low-to-medium levels as market participants have become cautious given the rapid price increases seen in the market. On November 11, major Chinese steelmakers Wuhan Iron and Steel Co. (WISCO) and Baosteel have issued their prices for December delivery, increasing their HRC prices by RMB 400/mt ($58/mt) and RMB 300/mt ($44/mt) respectively, thereby exerting a positive impact on the HRC spot market. 

On November 15, HRC futures prices at Dalian Commodity Exchange (DCE) have hit their maximum daily decrease limit of 6.02 percent, following a decline of 1.53 percent seen on November 14. However, some market insiders mentioned that, after the previous price rises, they had been expecting downward corrections in ferrous metal futures as commodity prices could not continue to rise indefinitely. 

It is thought that HRC prices in the Chinese domestic market will likely move sideways at their current high levels in the coming week, though uncertainties exist due to risks from the futures market.

 

 

17 percent VAT is included in all prices and all prices are ex-warehouse.

 $1 = RMB 6.85