Ex-China offers to Chile for HRC were heard early in the week ended November 18 at $465-480/mt CFR, CRC at $540-565 CFR, HDG at $600-620 CFR, and heavy plate at 430-435/mt CFR. These offers already reflected a $5-15/mt increase from offers made the previous week.
By Friday morning, November 18, Chinese offers increased once again despite mixed steel dynamics domestically including fluctuating futures market, fall of iron ore prices, perceived cap on accelerated price increases encountered on coking coal, and decreased capacity utilization rates. Through the noise, leading steel companies in China such as Hesteel, Angang, Baosteel, and Wuhan increased domestic prices on flat products substantially on the basis of raw steel price increases and claims of a strengthening domestic market.
Presently, prices on finished steel goods are overall expected to maintain most of their recent upward moves on the basis of continuing strong raw materials prices. A source close to SteelOrbis stated, “While this week has seen less volume activity on coking coal as the market comes to terms with its quick ascent and buyers sought to renegotiate, fundamentally, tightness in coking coal is not expected to ease for many more months given the supply constraints, low coal inventories at mills, and limited alternatives given the overall increase in raw materials options.” Another market participant commented, “Now that coking coal has the spotlight and the effects have been felt, prices are expected to be on a more steady uptrend going forward.”
Ex-China offers to Chile for HRC are now being heard at $495-500/mt CFR, CRC at $550-570 CFR, HDG at $630-640 CFR, and heavy plate at $460-470/mt CFR. These new offers reflect an increase of $20-30/mt on HRC, $5-10/mt on CRC, $20-30/mt on HDG, and $30-35/mt on heavy plate.
As the global markets showed signs of softening by the end of the day Friday, the local Chilean buyers are taking a wait-and-see approach.