HRC prices have seen a significant drop in the Chinese domestic market over the past week amid the sharp fall in the steel futures market and fairly quiet transaction activity. Most downstream users have been maintaining a wait-and-see stance towards the HRC market, with orders only being placed by those who have been running short of inventories.
Furthermore, with the end of the month approaching, some traders need to bring in funds and so they have been willing to negotiate on their offer prices. A cautious mood prevails among traders as the market situation is not what they had been expecting before the Spring Festival. A few traders even think that HRC prices might move down further in the absence of a significant improvement in demand.
Overall, it is expected that Chinese domestic HRC prices will see further declines, though decrease margins will be limited due to the support of costs.