HRC Price Expected to Hike in Late Mar
“Market price for HRC stays in correction at present; however, will move up about 20 days later,” Luo Yaoshun, GM of Shanghai Shunma Industry Co., Ltd expected.
It’s generally stable in HRC market after China’s Spring Festival (Feb 13-Feb 19), despite the speculative price rise in the first two days after the festival and the following fall caused by poor demand.
“The demand of HRC doesn’t wake up,” Luo said. According to Luo’s investigation on downstream demand, many factories didn’t restart their production yet.
Luo explained why the price didn’t show rise after the festival. Downstream users held waiting & seeing altitude, reflected by that they didn’t stock up HRC before the festival, different from their traditional behavior. Downstream users didn’t release their demand to support the price rise.
From another point of view, the poor demand could be proved too. Although Baosteel lately released its Mar price policy and showed 300 yuan/ton of price rise in HRC and CRC, the price rise policy didn’t work on market price, since there wasn’t support from demand.
“Beside the poor demand, high inventory is the other pressure on the price move,” Luo noted. HRC inventory continued to increase in Shanghai. It’s expected that the inventory already topped 1.5m tons, even 1.8m tons.
“Thus, price of common HRC will stay in 3800-3900 within days till end-Mar,” Luo gave out his expectation.
As to the new round of price hike, Luo anatomized drives behind the future price rise.
Support from demand will take place in end-mar, since downstream users will basically go into normal production during end-Mar and early-Apr. It’s estimated that the demand might be more than that in the same period of last year.
In addition, production cost is strong in pushing HRC price up. The rumor said that international iron ore price would roar this year. And, prices of other raw materials lingered at high level. Some mills also followed Baosteel’s Mar price policy to raise their factory prices by 30-80 yuan/ton.
Luo said that it’s certain that HRC price would go up. The price might show a strong upward momentum in the new round of price rise. According to Luo’s prediction, HRC market price will easily top 4000 yuan/ton and possibly touch 4200 yuan/ton in future.
