China HRC prices fall, local impact unlikely

Hot-rolled coil (HRC) prices have dropped in China by $25 a tonne to $475 a tonne over the last two weeks.

A steel sector analyst said, "As global scrap prices have come down in the last few weeks and demand from China has slackened a bit, global HRC prices have declined in China and neighbouring markets."

The domestic market, however, is unlikely to be impacted by the meltdown since HRC prices have been 'frozen' at Rs 25,000 a tonne till June-end.

Global HRC prices peaked around $570 a tonne in March this year, but started falling in the beginning of April this year. Prices in the East Asian markets have also softened $20-$25 to $470 a tonne.

In the United States and Europe, however, HRC prices have increased $20-$30 to $520-$540 a tonne owing to a strong demand from auto and housing segments.

HRC prices in the Middle East too have remain unchanged at around $490 a tonne.

Analysts said the price decline in China has been on account of the recent fiscal and monetary measures.

An analyst with a leading domestic brokerage said: "In China, it has become increasingly difficult to get bank and institutional credit for new infrastructure projects. This has slowed down infrastructure growth in the country and therefore demand for steel has decreased."