Higher HRC prices in the Chinese domestic market, stronger demand and the surge in futures prices have pushed up import activity in China. Despite political tensions between India and China, trading has resumed and Indian mills have managed to sell sizable lots to China, while HRC demand from Vietnam has been weaker. Higher activity and prices in the Chinese import market will support overall sentiment in the Southeast Asian market in the near future, sources believe.
This week, a number of deals (one of them for a cargo of 40,000-50,000 mt) have been heard at $442-445/mt CFR China, which translates to about $420/mt FOB as freight from India to China has increased to above $20/mt. In total, about 150,000 mt of Indian HRC have been traded to China, SteelOrbis has learned from sources. Some insiders report one contract at even $450/mt CFR, but this has not been confirmed by the time of publication as a majority of Chinese traders and Indian sources said that $445/mt CFR is the maximum price.
Offers for South Korean HRC were heard at $455/mt CFR early this week, but there have been no reports of a deal done so far.
In recent transactions, prices have increased slightly as in the previous round of purchases in late June the contract level was mostly below $440/mt CFR.
“The domestic market is stronger and futures are up. It [acceleration of imports] is expected,” a source from China said. The average HRC price in China’s local market has increased by RMB 35/mt ($5/mt) today, July 8, to RMB 3,805/mt ($542/mt) ex-warehouse, while the price hike has reached RMB 80/mt ($11.4/mt) for the past week, according to SteelOrbis’ information. Moreover, HRC futures at Shanghai Futures Exchange have added RMB 68/mt ($9.7/mt) or 1.9 percent today to RMB 3,696/mt ($526/mt).
Asian traders report that higher offers for HRC from India have started to appear in Southeast Asia. For instance, some offers for Indian SAE1006 have been at $445-450/mt CFR in Vietnam, while earlier the deal prices in this market were at $432-437/mt CFR. Buyers from Vietnam have not been ready to accept an increase so far and bids are still mostly below $440/mt CFR for now. “They [Indian mills] can sell to China at higher prices,” a trader said.
