Domestic prices of cold-rolled steel (CRC) in China fell to three-year lows due to the slow recovery in the automotive sector, which forced the plants with negative profitability is to reduce production.
base prices for cold-rolled steel with thickness 1.5-2 mm fell in Shanghai 500 yuan (about 71 dollars) over the past month to 3,600 yen per ton from the warehouse as of April 24, which corresponds to a decline of 18% this year. Shanghai prices for hot rolled coil (HRC) fell not so fast, a decrease of 16% to 3 290 yen per ton from the warehouse this year.
Weak demand for cars has become a major factor in the fall in steel prices. Car sales in China in January-March was the worst, falling by 43% to 3.7 million vehicles, while production declined by 45%, according to China Association of automobile manufacturers (CAAM).
Association said that after the resumption of flash Covid-19 in the country the factories in China were mostly recycled, but it is expected that the demand will not return to the level of last year until June.
a Short book of orders and, in some cases, zero or negative margin to encourage factories to plan production cuts sheet steel to compensate for the oversupply.
China's Largest steel mill Baowu Steel plans to suspend a production line for the production of cold-rolled steel sheet at its plant in Insane. The plant is one of four production bases Baowu, but currently, he is the only one that incurs losses, so the production of CRS will be stopped.
Chinese traders also were planning to cut orders for cold rolled steel factories, as some of them already suffered losses, as their settlement prices at the factory for deliveries in March were higher sales prices in the spot market.
market Forecasts remain negative for cold-rolled steel on the background of its high reserves. Industrial data show that CRC stocks in warehouses of traders last week were up 16% or 200,000 tons from a year ago.
