Chinese hot rolled coil prices kept rising last week on an improved outlook. This came after the politburo meeting of the Communist Party of China on 24 July announced its focus on boosting automobile and home appliance consumption for the rest of the year, Kallanish notes.

In Shanghai on Friday afternoon, 5.5x1,500mm Q235 HRC was traded at around CNY 4,100-4,120/tonne ($572-575/t), up CNY 170/t from a week earlier and touching the highest level since late April. On the Shanghai Futures Exchange, the most-traded October 2023 contract for HRC gained CNY 37/t from Thursday and CNY 184/t from a week ago to CNY 3,933/t.

After the politburo’s announcement, the Ministry of Commerce held a meeting on Wednesday for arrangements to promote automotive and home appliance consumption, which was attended by all provincial competent authorities. These signs supported a more bullish outlook for HRC demand in the second half.

Domestic HRC prices thus rose rapidly last week and further expanded the spread versus rebar. Nevertheless, inventory pressure is moving slowly from mills to spot merchants as a result of limited demand improvement. Most traders doubt prices will keep rising at the same pace this week.

Domestic gains also spurred a surge in export offers, which slowly accelerated last week as price increases became firmer. But there were still few transactions in the market.

On Friday, the most competitive offers for Chinese SAE 1006 HRC stood at $590-600/tonne cfr Vietnam, about $15-30/t higher than a week earlier. One Chinese exporter guessed the low-priced materials are being provided by a major mill in eastern China.

However, buyers were moving more slowly as they do not have much demand now after already buying some weeks ago, and they expect a price reversal. Few Chinese sellers said they had received bids. “It’s time to take holidays during the traditional low season,” an exporter in Hangzhou laments.

Kallanish assessed 2mm SAE 1006 HRC at $575-585/t fob China on 28 July, up $20/t from a week earlier.