During the week ending April 16, the Chinese domestic hot rolled coil (HRC) market has indicated a significant drop following the short-lived rebound seen in the previous week.
Against the background of the collapse in gold prices, the ongoing slump in crude oil prices and the declines in steel futures prices, HRC prices in the Chinese domestic spot market have witnessed a significant decrease, which has caused downstream users to halt their purchasing activities. Traders have informed SteelOrbis that transaction activity in the market has been quiet over the past week.
Major domestic producer Wuhan Iron and Steel Group (WISCO) issued its prices for May delivery on April 15, cutting its HRC prices by RMB 200/mt ($32/mt).
Since the beginning of the current year, most local steelmakers have been incurring losses, contributing to traders' lack of confidence in the prospects for the HRC market in the future. Most traders are inclined to sell the materials they have in hand in order to bring in funds, which means there is less support for steel prices. It is thought that HRC prices in the Chinese domestic market will likely decline further in the coming week.