During the week ending September 11, the significant rebound in the steel futures market has boosted confidence in the local Chinese hot rolled coil (HRC) market, while domestic HRC prices have moved up noticeably. Average HRC prices in the Chinese domestic market can be viewed in the SteelOrbis price reports section.
The uptrend observed in the Chinese HRC market has come against the background of a number of positive factors. Among these are the approval by the Chinese National Development and Reform Commission (NDRC) of infrastructure projects worth over RMB 1 trillion, the decision of the European Central Bank to purchase sovereign bonds from debt-stricken euro zone countries, expectations of new policies in China for the stabilization of foreign trade, while the market itself appears to have accumulated strong potential for a rebound following previous price decreases. However, traders state that, despite the increase in orders, buyers are still cautious and are waiting to see how the market will develop. Some traders are worried that the positive trend seen in the past week will not last long.
On September 10, Chinese steelmaker Wuhan Iron and Steel Co. (WISCO) announced its new price policy for October shipments, keeping its flat steel prices unchanged.
On the whole, it is still expected that the Chinese HRC market will witness an uptrend in the short term, though the trend may not be so positive in the longer run.