A further increase in the Asian HRC market has been witnessed on Wednesday, March 3, after sharp rises in the local market in China amid steel production curbs announced in Tangshan. Import prices in Vietnam have kept increasing this week, though they are still lagging behind asking prices from the major suppliers.
Domestic HRC prices in China have increased by RMB 120/mt ($18.6/mt) to RMB 4,920-5,000/mt ($762-774/mt) ex-warehouse on March 3 compared to the previous days, according to SteelOrbis’ data. The rise has followed a surge of RMB 168/mt ($26/mt) on the same day in HRC futures prices at Shanghai Futures Exchange, which closed at RMB 5,026/mt ($778/mt) today.
Prices have reacted to the news about steel production cuts in Tangshan, aimed at improving environmental conditions. The Tangshan authorities announced that production at seven blast furnaces should be stopped as of March 10. This will result in losses of a minimum of 5,000 mt of pig iron output daily. Also, the number of trucks arriving at all major mills will be reduced by half.
Chinese mills have also increased their HRC export prices. Offers from mills for boron-added SS400 coils have reached $740-765/mt FOB, up by $27.5/mt on average from the level on March 2.
Offers for ex-China re-rolling grade HRC are at $775-780/mt CFR in Vietnam, while the highest offers were mainly at around $770/mt CFR late last week.
According to market sources, the latest deal for ex-China SAE1006 HRC was done at $735/mt CFR to Vietnam in the latest booking from India, but it will be hard to find such a low offer from any large Chinese supplier now, sources believe. Last week, the same quality deal was at $720/mt CFR from China to Vietnam.
Vietnamese importers, interested in purchases, have been bidding at $735/mt CFR lately. Market sources expect new bookings at a higher level up to $750/mt CFR in the near future, taking into account suppliers’ bullishness.
As SteelOrbis reported earlier, two lots of 30,000 mt of Indian HRC each were booked at $730-735/mt CFR last week. For now, official offers from Indian suppliers are coming at $750/mt CFR, but some discounts are possible in negotiations.
The SteelOrbis reference price in Vietnam has been increased by $10/mt on average from last week to $735/mt CFR.
$1 = RMB 6.4565
