Ex-China HRC offer prices have moved up sharply this week amid the rising trend in the local market and the big increases seen in HRC futures prices following the Chinese New Year holiday, amid bullish sentiments among market players.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $705-740/mt FOB for April shipment, with a midpoint at $722.5/mt FOB, moving up by $40/mt on average compared to the level before the holiday on February 9.
Deals, according to sources, have been reported for ex-China SS400 grade strip at $675/mt FOB, but most sources believe that large mills will not sell HRC at below $680-690/mt FOB now.
For Chinese SAE1006 re-rolling grade HRC, demand has been silent in Vietnam, but most sellers believe the tradable level is $700-710/mt CFR. A deal has been heard at $720/mt FOB for SAE1006. This deal could be for Pakistan, according to sources, but it has not been confirmed by the time of publication.
“The production curbs, bullish sentiments towards the prospects for the future market, and the high levels of raw material prices have bolstered ex-China HRC offer prices, while the expected better demand following the long holiday will continue to provide support for prices,” an international trader told SteelOrbis.
During the given week, local HRC prices in China have moved up significantly amid resumption of production by downstream users following the long holiday. Inventory of HRC has indicated slight rises as buyers have been willing to build up stocks for the anticipated better demand in the future. Though the local price level has corrected downward on February 23, overall sentiment has remained positive.
Domestic HRC prices in China are at RMB 4,780-4,850/mt ($741-752/mt) ex-warehouse on February 23, with the average price level RMB 290/mt ($45/mt) higher as compared to February 9, according to SteelOrbis’ data. Compared with the price level on Monday, February 22, local quotations are RMB 25/mt ($3.9/mt) lower.
As of February 23, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,799/mt ($744/mt), increasing by RMB 183/mt ($28/mt) or 4.0 percent since February 9.
$1 = RMB 6.4516