According to Mr Li Jinlong manager of a Shanghai based CR trading company "According to our survey, CR market is and will be on the fluctuating downtrend which may last till mid July."
He said that CR sheet price has had a slip of CNY 300 per tonne to CNY 400 per tonne from the highest level of the year, sharply in comparison with that in HRC market of about CNY 600 per tonne to CNY 700 per tonne in general, some even of CNY 800 per tonne to CNY 900 per tonne.
Mr Li Jinlong said the prominent unbalance in demand and supply is materially responsible for the CR market decline. From current demand/supply situation, the price will be rippling downward within the space of CNY 300 per tonne to CNY 500 per tonne and bottom out in late July.
He said that taking auto industry an example, the major CR product consumer seemed not so robust in production and sales as in former period since Spring Festival. Demand decrease led to continuous fall of as much as CNY 1000 per tonne in auto CR sheet price by now.
He added that "Traders seemed to hold a bleak outlook over the future market behavior. It was expected that the May ex-works price would have been lifted further, but many mills kept it flat, that meant a decline for traders and made them despondent.”
In terms of supply respect, steel mills are still releasing capacity, causing output augment. The statistics show that domestic CR coil/sheet output registered over 4.19 million tonnes surging 41.6% from last year. Besides, inventories are generally standing at a high level in China major markets.
And if there is a downward correction by mills in early to mid June the market sentiment will undoubtedly be influenced again making it impossible for CR price to rally in June.