During the past week Chinese hot rolled coil (HRC) market prices rose up at the beginning of the week but later dropped back down. The average HRC prices in the main Chinese markets are currently as follows:
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
HR |
5.75 mm x 1,500 mm |
Q235B |
4,333 |
-34 |
653 |
-5 |
HR |
2.75 mm x 1,250 mm |
Q235B |
4,457 |
-3 |
671 |
-0.45 |
On November 16, Q235/S400 5.75 mm hot rolled coil (HRC) prices stand at RMB 4,300/mt ($648/mt), RMB 4,350/mt ($655/mt) and RMB 4,350/mt ($655/mt) respectively in the Shanghai, Tianjin and Lecong markets. In addition, Q235 2.75 mm HRC stands at RMB 4,380/mt ($660/mt), RMB 4,430/mt ($667/mt) and RMB 4,560/mt ($687/mt) respectively in the abovementioned markets. All the above prices include 17 percent VAT (US$1 = RMB 6.64).
During the past week, Chinese HRC market prices rose up at the beginning of the week before falling back down later. The downward trend started from November 12. Before November 12, prices reached peak levels, though downstream buyers preferred a wait-and-see approach. Starting from November 12, the domestic steel futures market began to fluctuate and market confidence weakened. As a result, market prices began to fall.
Most traders in the market are not excessively worried about the latest downward trend, as they consider that prices have just fallen back to normal levels after a rapid uptrend.
During the past week, many steelmakers published new prices. Masteel and Shagang Group both increased their HRC prices. At present, spot market prices are still higher than ex-mill prices.
On November 12, aggregate hot rolled coil inventory in the main Chinese cities was 4.6405 million mt, down 74,100 mt from November 5. Inventory in the eastern Chinese market registered the biggest decrease, followed by the southern Chinese market. Inventory in Shanghai on November 12 was 1,873,130 mt, down 23,480 mt week on week.
Generally speaking, inflation has been exerting strong pressure on the market, and steelmakers have all increased their ex-mill prices. Costs will continue to provide some support for market prices in the coming period. It is expected that the Chinese HRC market will continue to see fluctuations in the week ahead.