Slight fluctuations observed in Chinese CRC market

During the week ending August 24, cold rolled coil (CRC) prices in the Chinese domestic market have continued their trend of slight fluctuations seen in the previous week. Looking to the future market, market players are quite positive. As of August 24, the average cold rolled coil prices in the main markets in China are as follows:

As of August 24, the prices of ST12 1.0 mm x 1,250 mm x C cold rolled coil in the Shanghai, Tianjin and Lecong markets are respectively at RMB 5,410/mt ($845/mt), RMB 5,360/mt ($838/mt) and RMB 5,600/mt ($875/mt). Meanwhile, the sales prices of ST12 1.0 mm x 1,250 mm x 2,500 mm cold rolled coil in these markets are respectively at RMB 5,470/mt ($855/mt), RMB 5,450/mt ($852/mt) and RMB 5,650/mt ($883/mt). All the prices above include 17 percent VAT. ($1 = RMB 6.40)

There has been no great change in CRC inventory in the Chinese market recently. As of August 19, total CRC inventory in the domestic market came to 1.61 million mt, up 3,730 mt from the previous week. In the Shanghai market on the same date, inventory of CRC products stood at 564,890 mt, down 900 mt week on week.

Higher raw material costs have provided support for market prices in the given week, while domestic CRC producers have hiked their ex-works prices for September. Meanwhile, electricity rationing measures and plant overhauls have impacted supplies. Traders are confident about the current market situation and most are reluctant to sell significant tonnages from their inventories.

However, uncertainties still exist in the market. For example, higher production costs have narrowed mills' profit margins and have also placed them under financial pressure. Furthermore, despite the positive anticipations for the next two months, end-users are maintaining a cautious stance, just purchasing for their minimum requirements.

In the short term, the Chinese CRC market is expected to follow a slight upward trend.