It is reported that driven by the hot auto market in China, prices of for auto making continue surging up.
Mr Li Zhongshuang GM of Shanghai Ruikun Metal Material Co Ltd a HR/CR sheet specialist in Shanghai said auto sheet market will stabilize this year and prices will run on high level.
Mr Li’s latest survey shows CR sheet market has risen up firmly after the start of July. In the second trading week, CR prices basically level off, however, are expected to continue the rising quickly in the following days due to the strong demands amid short supply in the market.
At present, Mr Li’s company prices Baosteel made CR sheet at
1. CNY 4730 per tonne for 0.8mm,
2. CNY 4680 per tonne for 1.2mm
3. CNY 4660 per tonne for 1.5mm
4. CNY 4680 per tonne for 1.8mm
During July11th to 12th
1. CR sheet prices kept rising in Shanghai. Anshan Steel provided 1.0mm CR sheet is quoted at over CNY 4800 per tonne
2. 1.2mm to 2.0mm sheet at CNY 4730 per tonne to CNY 4750 per tonne up by CNY 20 per tonne to CNY 30 per tonne
3. Wuhan Steel and Benxi Steel made 1.2mm to 2.0mm sheet went at CNY 4700 per tonne to CNY 4720 per tonne up by CNY 30 per tonne.
Mr Li noted that “It is the releasing demands from downstream auto market that contributes to the well going performances in CR sheet market. In recent months, the production and sales of auto market has bloomed under the supports of China’s stimulus policies and a new record was created in H1 2009 when China produced 5.99 million units of cars and sold 6.098 million units, respectively up 15.22% and 17.69% from the corresponding period of last year.”
The statistics show that China will consume above 11.3 million tonnes of sheets in auto sector this year including over 7 million tonnes of CR sheet & coil and the demands are releasing now.
Mr Li added that mills are continuously increasing their July EXW prices, which are generally higher than spot prices and finally push up the later. Many mills increase CNY 200 per tonne to CNY 380 per tonne to their July EXW prices over June level.
In addition to the above two factors, mills has consolidated and enlarged their direct supply channels to auto makers, so that less resources come to the market, caused tight supply. As learned, Baosteel has raise the ratio of direct supply up to 80%, after the mill signed strategic agreements with lots of auto makers.
Besides, prices for HR sheet & coil maintain going up with fluctuations, giving a push on CR sheet market too. Lately, trades of CRC go better, thanks to the market optimistic expectation boosted by the rises in HRC prices and BaoSteel unexpected uprising of August EXW prices.
Mr Li concluded that market prices for CR sheet will continue the high level in the future, and the stabilization will dominated the market under the backdrop of releasing demands, low inventory uplifting EXW prices and the rising HR market etc.