The day after the export rebate cancellation announcement coming out, the hot rolled coil price began falling in the Shanghai market. Although Chinese steel traders are not optimistic about the future, they believe that RMB4000/tonne is the bottom price of hot rolled coil.
The steel export rebate cancellation is really bad news to the Chinese domestic market, as steel export will encounter more difficulties and export volume will decrease. As a result, more steels have to be consumed in the domestic market, which means the supply and demand contradiction will be intensified further. Certainly, the current situation is against Chinese steel market. In the short run, the hot rolled coil market is also influenced, so the price may continue to go down.
However, it is widely expected that hot rolled coil price will not fall sharply in the future, as the present price almost hits the bottom.
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