Reluctance to book new hot rolled coil cargoes in China

Reluctance to book new hot rolled coil cargoes in China

Chinese buyers have been consistently reluctant to commit themselves for new hot rolled coil import contracts for the last few weeks, forcing sellers to drop their prices. As reported by SteelOrbis, the quotas allocated to some major suppliers were already fully utilized and new quotas may be given only by May 24, 2003. Market sources confirm that demand is still strong in China however market sentiment is very bad due to huge stocks and expected inbound cargoes to arrive, particularly from the US mills. There is speculation in the market that the quantity of US origin material could be well over the allowed limits and distressed cargoes might fuel further downfall of the market. The market has already dropped $30-35/mt within a few weeks and nowadays Ukrainian origin hot rolled coils are offered at the range of $310-315/mt CFR FO one main Chinese port for April/may shipments, for arrival after May 24. The new quotas could give some boost to the market. But, despite strong demand the market could go down even further, unless there is a quick resolution to the war in Iraq.