During the week ending January 22, hot rolled coil (HRC) prices in the Chinese domestic market have seen slight drops for some specifications, while prices of other specifications remained unchanged. Average HRC prices in the local Chinese market can be viewed in the SteelOrbis price reports section.
Since increases in domestic steelmakers' ex-works prices for February delivery have boosted market participants' confidence in the prospects for the future market, many traders are not inclined to cut prices in order to improve sales volumes.
Today, January 22, Baosteel issued its price policy for March delivery ahead of schedule, raising its HRC prices by RMB 200/mt ($31/mt), with its ex-works price of 5.5 mm x 1,500 mm HRC now at RMB 4,402/mt ($702/mt), excluding 17 percent VAT. Some traders believe that with its price announcement Baosteel is aiming to stimulate the activity of traders who have not yet made decisions to build up inventories, and, on the other hand, hopes to shift the cost pressure from rising raw materials on to traders.
Overall, supported by higher costs, it is expected that Chinese domestic HRC prices will move sideways in the coming period.