China’s HRC sees better demand locally, export price uptrend hardly visible

Ex-China HRC suppliers have been making small attempts to increase their offers given some improvement seen in the domestic and futures markets in China amid the stimulus policies issued for the real estate sector. However, the general level of business activity both in the local and export HRC markets has been rather moderate, while the higher prices targeted for ex-China HRC have not been achieved, with the majority of bids in all main trade destinations remaining low.

At present, export offers for boron-added SS400 HRC from large Chinese mills have settled at $565-580/mt FOB, with a midpoint at $572.5/mt FOB, up by $2.5/mt week on week. “Several big mills who were offering at $560/mt FOB last week have actually made attempts to increase their offers to $565/mt FOB this week, but enquiries from buyers are rare these days and nobody is ready to accept higher offers,” a market insider told SteelOrbis.

As a result, the tradable level for ex-China SS400 has remained at the same level as at the end of last week, and is up by $10/mt since last Tuesday, August 29, standing at $540-550/mt FOB. However, according to sources, several higher offers have been heard at $550-560/mt FOB from Chinese traders, mainly supported by the better mood in the HRC futures market in China. At the same time, according to Vietnamese buyers, ex-China SS400 HRC offers have been voiced at $550-555/mt CFR, the same as at the end of last week, while most bids have remained below the $550/mt CFR level. Customers in Pakistan have been receiving offers for ex-China SS400 HRC at $570/mt CFR, up by $5/mt week on week. Besides, following several deals at $575/mt CFR in the UAE last week, this week ex-China SS400 HRC offers to the UAE have been voiced at $570-580/mt CFR.

In the meantime, during the given week Chinese policymakers issued stimulus measures for the real estate industry, providing solid support for HRC prices. Market sentiments have improved significantly, exerting a positive impact on the HRC market. However, typhoon Haikui landed in Fujian Province, negatively affecting the demand for HRC. Thus, transaction activities in the HRC market have not indicated significant improvement yet.

Domestic HRC prices in China are at RMB 4,090-4,110/mt ($570-572/mt) ex-warehouse on September 5, with the average price level RMB 105/mt ($14/mt) higher compared to August 29, according to SteelOrbis’ data.

As of September 5, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,906/mt ($544/mt), increasing by RMB 58/mt ($8/mt) or up by 1.5 percent since August 29.

$1 = RMB 7.1783