Rising trend in China’s CRC market amid sluggish activity

During the past week, China's cold rolled coil (CRC) market has seen a rising trend amid sluggish transaction activity. As of July 14, the average cold rolled coil prices in the main markets in China are as follows:

As of July 14, the prices of ST12 1.0 mm x 1,250 mm x C cold rolled coil in Shanghai, Tianjin and Lecong are respectively RMB 5,300/mt ($819mt), RMB 5,150/mt ($796/mt) and RMB 5,450/mt ($842/mt). For ST12 1.0 mm x 1,250 mm x 2,500 mm CRC, prices stand at RMB 5,360/mt ($828/mt), RMB 5,400/mt ($835/mt) and RMB 5,550/mt ($858/mt) in the abovementioned cities. All prices include 17 percent VAT ($1 = RMB 6.47).

As of July 8, aggregate CRC inventory in the main Chinese cities totaled 1.65879 million mt, decreasing by 20,030 mt as compared to the week before.

In the past week, CRC prices in the main local Chinese markets saw an obvious increase compared with last week, while a slowdown was observed in transaction activity. As many traders are anxious to conclude bookings, they do not want prices to increase at the moment. Many traders have lowered their inventory, and so inventory of certain specifications is very low. As for the mills, raw material costs have impacted on profits, while major domestic steelmaker Baosteel has increased its prices for CRC products. Following Baosteel's price announcement, other mills are also expected to issue their CRC prices for August delivery. It is predicted they are likely to follow Baosteel's upward price trend. 

Overall, the rebound of CRC prices in China has been driven by the steel futures market, and China's CRC market is not expected to rebound dramatically until demand gains strength. In the current context, most traders are adapting to the market situation and adjusting their inventory levels accordingly. It is thought that there will be limited room for the upward movement of China's CRC market in the coming week.