During the Labour Day holiday, the prices of hot-rolled coil (HRC) in major cities across China remained stable.
On the first day after the holiday, in the east China market, the quoted prices in Shanghai and Zhangjiagang remained stable compared to the pre-holiday levels on a WoW basis, with a weak market inquiry atmosphere. In the Ningbo market, spot cargo was quoted at 3,240-3,250 yuan/mt at the end of the trading day today, with moderate market trading performance. End-users were cautious and mainly adopting a wait-and-see attitude, while traders showed low enthusiasm for shipments.
In the south China market, on the 6th, the quoted prices at the end of the trading day in the Lecong market were 3,290-3,300 yuan/mt, rising slightly by 20 yuan/mt compared to the pre-holiday levels on a WoW basis. However, the overall trading performance was weak, mainly due to the shortage of certain specifications in the local market. During the holiday, traders mostly raised prices for shipments, and shipments were moderate. Therefore, they stood firm on quotes after the holiday, suppressing the overall trading volume.
In the northern market, on the 6th, the overall trading performance of HRC in the major northern markets was moderate. In Tangshan, spot cargo was quoted at 3,220 yuan/mt at the end of the trading day, remaining stable compared to the pre-holiday levels, with a moderately weak market trading atmosphere. In the Shenyang market, spot cargo was quoted at 3,260 yuan/mt at the end of the trading day, also remaining stable compared to the pre-holiday levels, with weak HRC trading performance.
In the cold-rolled and galvanized sheet market, on the 6th, the quoted price of Bensteel Group's cold-rolled DC01 1.0 in Shanghai was 3,700 yuan/mt, dropping slightly by 10 yuan/mt compared to the pre-holiday levels. The market trading situation was similar to that before the holiday, with moderate overall trading performance.
Looking ahead, as May approaches, according to the latest survey by SMM, the impact from maintenance on domestic steel mills' HRC production is expected to increase slightly compared to April on a MoM basis. However, considering the recent weakening of cold-rolled sheet orders and profit margins, some steel mills have already taken or planned actions to switch from cold-rolled to hot-rolled production. It is expected that domestic HRC supply will continue to fluctuate at a moderately high level in May. On the demand side, short-term exports remain resilient, while domestic demand is expected to decline slowly. However, current inventory levels are still relatively low compared to the same period in the past three years. Overall, the imbalance between supply and demand in the short-term HRC market is low. It is expected that prices will continue to fluctuate rangebound, with the fluctuation range of the most-traded hc2510 contract expected to be 3,170-3,280.