Cautious sentiments keep ex-China HRC export prices range-bound

Ex-China hot rolled coil (HRC) export prices have remained largely stable from mills over the past week, moving sideways amid cautious market sentiments, despite attempts by some traders to push offers slightly higher. Export activity has stayed moderate, with demand uneven across destinations, while domestic market uncertainty ahead of the Chinese New Year holiday has continued to weigh on pricing dynamics.

Specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $470-485/mt FOB, with a midpoint at $477.5/mt FOB, the same as last week. However, offers from smaller private mills have been voiced mainly at $468-475/mt CFR, versus $465-475/mt CFR last week, while their business activity has remained slow.

At the same time, offers from Chinese traders have been voiced at $465-470/mt FOB, the same as last week, up by $5/mt on the lower end of the range week on week, while most traders have been targeting a minimum of $470/mt FOB in the next round of sales, according to sources. Ex-China 2,000 mm Q235 HRC offers in Vietnam are still rare due to the absence of non-VAT offers, with the indicative price standing at $485/mt CFR. Meanwhile, ex-China SAE1006 HRC offers to Pakistan have been reported at around $480-485/mt CFR, following a deal signed at $478/mt CFR last week.

Meanwhile, Chinese offers for SS400 HRC to other destinations like the Middle East have settled at around $500-510/mt CFR UAE, depending on the supplier, up by $5/mt on the higher end of the range week on week. In addition, Chinese Q195 HRC offers through traders to Turkey have been estimated at $500-505/mt CFR for March shipment, the same as last week, while offers for S235 HRC have settled at $510/mt CFR for March shipment.

“Market sentiment remains largely negative amid a weak macro environment, though steel prices recorded a slight adjustment today. Winter demand remains subdued, while mill output levels have seen no significant changes and end-user demand continues to be sluggish,” a market insider told SteelOrbis.

“The export market is stable, with most base prices unchanged, although demand from far-sea destinations has shown some improvement at higher price levels,” he added.

In the meantime, average HRC prices in the Chinese domestic market have remained relatively stable or shown a slight decline compared to the previous week amid the prevailing cautious sentiments. Domestic HRC prices in China have settled at RMB 3,290-3,420/mt ($471-489/mt) ex-warehouse on January 27, with the average price level RMB 3/mt ($0.4/mt) lower compared to that recorded on January 20, according to SteelOrbis’ data.

During the given week, uncertainties in the HRC market have been increasing since the Chinese New Year holiday (February 14-23) is approaching. Meanwhile, cautious sentiments have prevailed among market players, exerting a negative impact on HRC prices. Downstream users have mostly purchased as needed, resulting in quiet transaction activities in the HRC market.

As of January 27, HRC futures at Shanghai Futures Exchange are standing at RMB 3,289/mt ($470.5/mt), increasing by RMB 13/mt ($1.9/mt) or 0.4 percent since January 20, while decreasing by 0.6 percent compared to the previous trading day, January 26.

$1 = RMB 6.9858