Chinese steel market is awfully unpredictable. Flat steel products include Hot Rolled Coil, Cold Rolled Coil, Galvanized Coil, etc. Hot Rolled Coil (HRC) is the biggest capacity in flat steel product, thus HRC’s price is the based price of other flat products.
March Summary:
From the end of Spring Festival of 2017 (After Feb 2 until now), the inventory in the various public warehouse in Tianjin/Shanghai was increased quickly. In the past one year, the public warehouse inventory kept low level. The key reason is mill’s limited capacity and most of market traders/gamblers would not like to keep the inventory as the price from high level into valley bottom. However, following Chinese government announcing new budget for various projects like expressway, airport, road, High-speed train, as well as the overheating housing market in 2016, the prospection of most of steel market player: trader/stockist/end-users, esp for trader/stockist was very optimistic. Most of players predicted firmly that the price of steel would be increased much after spring festival. However, things are not like the trend which most people expected. From Mid of March, the flat steel products’ price decreased very quickly. In Tianjin local market, Today, Tianjin Market’s HRC price is RMB 3330/MT (include VAT), CRC price is RMB 3780/MT (include VAT). Compare the highest price which came out on the date after spring festival: HRC highest price is RMB 3800/MT, CRC highest price is 4600/MT, the HRC decreased USD 70/MT and CRC decreased USD 120/MT. The price decreased pace was very fast. A lot of trader and gambler bore lose.
Our opinion of April market of HRC/CRC/GI:
The reason of this round of price increasing is the “optimistic prospection”. The products of Mills was not floured into the end-users directly, but bought and “saved” into the warehouse. Actually, the demand of steel did not change too much. Meanwhile, most of traders’ cash was not plenty. The “demand” and “cash” affected the price down. For the price of April, the price may be further down until more and more steel mills begin decreased production capacity.
(All above opinion is only from our company, which is just for the reference.)