Ex-China cold rolled coil (CRC) prices have moved down over the past week due to the downward correction in futures prices after the insufficient supportive measures announced by the Chinese government for the struggling real estate sector, and also given the prevailing cautious sentiments following the previous big price rises.
At present, the tradable export prices for CRC from major Chinese mills are at around $565-580/mt FOB, for December shipment, moving down by $17.5/mt on average week on week. Meanwhile, though most mills have been trying to not reduce offers below $580/mt FOB, the real market level has been lower at $565-575/mt FOB, according to market sources, due to the fall in the local market and in HRC prices from China.
During the given week, CRC prices in the Chinese domestic market have moved down amid the decreasing trend of HRC futures prices. Meanwhile, demand for CRC has not seen any improvement, weakening the support for prices. At the same time, following the previous sharp increases, market players need time to digest them and demand also needs time to match the prices. Inventory of CRC has been at relatively high levels, exerting a negative impact on prices. It is thought that CRC prices in the Chinese domestic market may move down in the coming week.
On October 17, average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 3,977/mt ($559/mt) ex-warehouse, decreasing by RMB 170/mt ($24/mt) compared to October 9, according to SteelOrbis’ information.
As of October 17, HRC futures at Shanghai Futures Exchange are standing at RMB 3,436/mt ($482/mt), decreasing by RMB 142/mt ($32/mt) or 4.0 percent since October 10, while down 4.87 percent compared to the previous trading day, October 16.
$1 = RMB 7.122