With HRC prices in Chinese domestic market have been surging Mr Li Shuangzhong GM of Shanghai Rui Kun Metal Material Co Ltd reminds market players to remain cautious.
Mr. Li believes that the price rise is being propelled due to following factors
1. Demands of downstream industries increase with the warmer weather
2. Increase in international steel demands because of recovery in international market
3. Steel production costs such as iron ore and coke prices continue to rise
4. Traders'' eagerness to pull up the prices.
However Mr Li said “Although HRC prices are on increasing trend, traders still need to guard against potential risks in the rapid price growth,.”
He said “”On one hand there is huge inventory pressure because the high production levels of steel mills has not been reduced, on the other hand there are still many uncertainties in steel exports and the national macro adjustment this year.”