At the beginning of the past week (October 14-21), the Chinese cold rolled market continued its falling trend of the previous week. However, from October 16 onward, a slight uptick has been evident in the market, led by the positive movement in the domestic hot rolled market.
Product name | Specification | Category | Average price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) |
CRC | 1.0 mm x 1,250 x C | SPCC | 4,657 | +40 | 683 |
CRS | 1.0 mm x 1,250 x 2,500 | SPCC | 4,813 | +30 | 706 |
As traders' stockpiles all consist of high-priced materials, many are seeking to follow the current uptrend in both the futures market and in the domestic hot rolled market, in order to minimize their losses
In spite of the current price upturn, most cold rolled traders are still cautious for the following reasons: on the one hand, inventory pressure continues to be present, as local steel mills have shown no intention of curbing production and as import materials have been arriving in significant quantities. On the other hand, the latest census data from China's National Statistics Bureau show that China's daily output of crude steel so far in October has been 1.69 million mt, up 70,000 mt compared to September, constituting a new historic high.
According to the relevant statistics, cold rolled inventory in the leading Chinese leading markets has continued to rise, with the greatest increase seen in the eastern Chinese market. At present, cold rolled inventory in the leading Chinese markets stands at around 1.21 million mt, a year-on-year increase of 170,000 mt or 12 percent. As of October 16, cold rolled inventory in Shanghai stood at 367,100 mt, a rise of 2,100 mt week on week.
Throughout the past week, leading domestic mills announced new pricing policies, according to which overall prices have trended down significantly. Traders are thus still facing losses.
On October 14, Liaoning Province-based Anshan Steel Corp. issued November prices for some of its products. Its cold rolled coil price is down RMB 300/mt ($44/mt), with ST12 1.0 mm cold rolled sheet now priced at RMB 3,990/mt ($585/mt) ex-mill. The price excludes 17 percent and is effective immediately.
On October 14, Wuhan Province-based Wuhan Steel Group released its ex-factory prices for November. Based on the new price list, as of October 14, the CRC price has decreased by RMB 400/mt ($59/mt), with Q195 1.0 mm cold rolled sheet priced at RMB 4,950/mt ($726/mt), while Q195 1.0 mm cold rolled coil is priced at RMB 4,900/mt ($718/mt). Prices exclude 17 percent and are effective from October 14.
On October 21, Beijing-based Shougang Steel Group announced a new price adjustment for November. Accordingly, CRC decreases by RMB 400/mt ($59/mt) in price. The new ex-mill price of SPCC 1.0 mm cold rolled coil is at RMB 4,370/mt ($641/mt). The price excludes 17 percent and is effective from November 1.
However, on the bright side, the Autumn Canton Fair indicates that the booking volume of white goods enterprises is notably up on the figure for the previous fair. This will necessarily boost the development of China's cold rolled market in the future period.
Summing up, the current rebound of domestic cold rolled prices in China is caused by the uptrend of the hot rolled market; however, the prices have increased at a slower rate in the cold rolled market compared to the hot rolled market. It is expected that China's cold rolled market will be characterized by a fluctuating trend in the coming week.