Ex-China HRC offers from mills stable, traders hike prices after discounted deals

This week, most Chinese HRC mills have kept their export offers for HRC mainly stable even though HRC futures prices have continued to fluctuate. More specifically, after some rebound seen in futures prices on Friday, July 14, prices fell on Monday, July 17, but then rebounded again on Tuesday, July 18, affecting market sentiments and the HRC spot market trade in general. At the same time, traders who agreed to provide additional discounts in new deals to Asian customers, have this week increased their prices in new offers. 

At present, export offers for boron-added SS400 HRC given by major Chinese mills have settled at $555-565/mt FOB, the same as last week, with several offers still heard at $570/mt FOB. “Most mills have maintained their offers stable at high levels, but all know they can provide some discounts to big buyers,” an international trader told SteelOrbis. 

Meanwhile, the tradable level for ex-China SS400 HRC has been estimated at $540-550/mt FOB, depending on the destination. In particular, offers in Vietnam have been voiced at $550/mt CFR from traders offering without VAT, while other Chinese offers have been heard at $560-565/mt CFR. This means that prices have gained around $20/mt over the past week. Meanwhile, offers for ex-China SS400 HRC have been heard at $563-566/mt CFR Pakistan for mainly September shipment, up by 5-10/mt week on week. Furthermore, ex-China SS400 and Q195 HRC have been offered to the Middle East and Turkey at $580-590/mt CFR, the same as last week. 

In the SAE1006 HRC segment, more business activity has been seen, with at least 20,000 mt of ex-China materials reported to have been sold in position at $565-575/mt CFR in Vietnam last week, while new offers have been reported at $590/mt CFR Vietnam this week. “We still believe it is possible to book at $575-580/mt CFR, as trade remains slow in other destinations for Chinese exporters,” a Vietnamese trader. Meanwhile, a deal for 10,000 mt of ex-China SAE1006 HRC has been reported in Pakistan at $588/mt CFR, according to sources, while negotiations for another ex-China deal have been heard at $595/mt CFR. 

Meanwhile, average HRC prices in the Chinese domestic market have moved on an increasing trend amid the rises seen in HRC futures prices. 

During the given week, demand for HRC has continued to be slack due to the high temperatures and the negative impact of typhoon Talim, which hit southern China. However, HRC futures prices have moved on a rebounding trend, exerting a positive impact on prices in the spot market. Meanwhile, import iron ore prices have moved up in the given week, providing solid support for HRC prices from the cost side. It is thought that HRC prices in the Chinese domestic market will likely move sideways in the coming week. 

Domestic HRC prices in China are at RMB 3,870-4,000/mt ($542-560/mt) ex-warehouse on July 18, with the average price level RMB 17/mt ($2.4/mt) higher compared to that recorded on July 11, according to SteelOrbis’ data. 

As of July 18, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,850/mt ($539/mt), increasing by RMB 68/mt ($9.5/mt) since July 11. 

$1 = RMB 7.1453