Local HRC prices relatively stable in China, sentiment uncertain

Following the increase in HRC prices in the Chinese domestic market last week amid the improving demand from downstream users, this week domestic prices have been relatively stable, with only a slightly decrease seen as compared to the end of last week. At the same time, according to sources, sentiment over the future price trend remains uncertain as, despite higher supply, futures prices keep rising gradually.

During the given week, demand for HRC has improved, pushing prices slightly higher, though steelmakers’ increased production capacity utilization and higher supply to the market have exerted a negative impact on HRC prices. Meanwhile, HRC futures prices have seen a slight uptrend, signaling cautious sentiment as regards the future prospects for the market. At the same time, import iron ore prices have decreased, weakening the support for HRC prices from the cost side. In actual transactions, sellers could accept some price declines, aiming to seal deals. Thus, it is thought that HRC prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.

Domestic HRC prices in China are at RMB 4,240-4,330/mt ($610-623/mt) ex-warehouse on February 28, with the average price level up by RMB 5/mt ($0.72/mt) compared to February 21, but down by RMB 5/mt ($0.72/mt) since Friday, February 24, according to SteelOrbis’ data.

As of February 28, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,260/mt ($613/mt), increasing by RMB 6/mt ($0.9/mt) or 0.14 percent since February 21.

$1 = RMB 6.9519