Ex-China HRC offer prices edged down late last week and, though mills have been trying to hold offers stable since then, local prices have continued to follow the downtrend though the outlook for the export segment has remained bearish.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $840-860/mt FOB for January shipment, with a midpoint at $850/mt FOB, moving down by $20/mt compared to November 2, though moving sideways compared to the prices recorded on November 4-5. The lowest possible level possible from mills has been at $820-830/mt FOB.
“The export of HRC has been stagnant, especially from mills,” an international trader told SteelOrbis. Firstly, this was connected with the rapid declining pace of prices and the caution of buyers in the falling market. While on the other hand, most deals heard lately were for position cargoes from traders for shipment later than January, and prices were much lower in these trades.
For instance, the tradable price level for SS400 coils from traders, offering in short positions for February shipment and beyond, has been heard at $790-805/mt FOB. But in some cases, traders may consider even lower levels - a sale for SS400 HRC has been rumored in Vietnam at $810/mt CFR for shipment after February, according to sources.
The workable price level for SAE1006 HRC from Chinese small mills and traders has been reported at $800-805/mt FOB and this level has already been fixed in deals.
There have been rumors about two contracts for 30,000 mt each to Turkey at $840-855/mt CFR for February shipment or beyond. Customers have not confirmed the bookings by the time of publication, but the information has been actively discussed in the market. One of the major traders said that these are definitely position cargoes from traders and they will hedge the risks at the futures exchange to offset possible losses.
In Vietnam, the latest deals for ex-China HRC, both SS400 and SAE1006, have been heard at $850/mt CFR, which translates to slightly above $800/mt FOB with the current lower freight rates.
During the given week, China’s local HRC prices have indicated sharp declines amid slack demand and continuously decreasing ferrous metal futures prices. Meanwhile, market players mostly hold bearish sentiments towards the prospect for the future HRC market. It is thought that HRC prices will likely fluctuate within a limited range in the coming week.
Domestic HRC prices in China are at RMB 4,920-5,010/mt ($770-784/mt) ex-warehouse on November 9, with the average price level RMB 90/mt ($14.1/mt) lower as compared to November 2, according to SteelOrbis’ data. Compared with the price level on Monday, November 8, average local quotations are RMB 55/mt ($8.6/mt) lower.
As of November 9, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,502/mt ($704.5/mt), decreasing by RMB 99/mt ($15.5/mt) or 2.15 percent since November 2.
$1 = RMB 6.3903
