At present, supplies of HRC products in the Chinese domestic market are on the short side. Meanwhile, the spot inventory levels of most traders are at historic lows, which has provided support for the uptrend of prices. In addition, the ongoing positive price trend in the futures market has also contributed to the current upturn in the HRC spot market.
On November 12, major Chinese steel producer Baosteel announced an increase of RMB 100/mt (approx. $16/mt) in its HRC prices. The increase reflects the fullness of the order book of the steelmaker. This move was followed by many other steel producers, thus increasing expectations of further price increases in the market. However, some traders say they are not impressed by current levels of actual demand.
For the short term, it is thought that HRC prices in the local Chinese market will probably continue to trend upwards.