It is reported that the lasting sluggish situation in HRC and CRC market has recently eyed some changes with prices witnessing an overall rally.
Mr Li Zhongshuang General Manager of Shanghai Ruikun Metal Materials Co said that CRC and HRC market may continue edging up amid corrections in short term with limited price increase.
According to his survey, the thin gauge HRC in Shanghai has increased by CNY 20 per tonne since this week with that of thick gauge up CNY 40 per tonne which was attributed to the price hike of iron ore, strong demand for rebar, low inventory and steel trading enterprises gradually stock up as demand increases.
At present, the steel trading enterprises spot resources are generally insufficient. As the purchase prices are higher than the selling prices, steel trading enterprises reduced their quantity of orders from the steel mills and after a period of destocking, the available resources are basically on the decrease, resulting in incomplete sets of some varieties and shortage of some products, like 1.0mm to 1.5mm CRC. Besides, the price hike of HRC also pulled up the increase of CRC prices.
Furthermore, many steel mills have successively released their Aug ex-w price policies, mostly keeping their prices unchanged which is helpful to stabilize steel trading enterprises attitudes. In addition, high raw material cost also bolstered steel prices. Since July imported iron ore prices have risen from USD 176 per tonne to the current USD 183 per tonne to USD 184 per tonne.
The price of steel billet also witnessed rises. All these factors pushed middle and small sized steel mills without self sufficient mines to raise their EXW prices. With the high raw material cost passed on to the market, steel trading enterprises purchase cost was increased. As a result, some traders increased their prices resulting in the current rising trend of CRC and HRC market.
Seen from the current upward trend of raw material market, the steel enterprises will not cut EXW prices in the future market which further reduces the downward room. However, some operators still have concerns about how long the CRC and HRC market can keep rising as lot of uncertainties still exist in the whole market like the continuous release of steel capacities.
Latest data shows that domestic HRC volume in June reached 14.04 million tonnes up by 8.5%YoY a new record high with the daily output arriving at 468,000 tonnes up by 4.93%MoM and domestic CRC volume hit 4.92 million tonnes up by 15.9%YoY with daily output reaching 164,000 tonnes up by 6.1%MoM.
( Source: www.steelguru.com )