China’s “moderately loose” monetary policy boosts mood for ex-China HRC exports, spot prices fail to react much

Average HRC prices in the Chinese domestic market have rebounded today, December 10, amid increasing HRC futures prices and China’s announcement of a “moderately loose” monetary policy for 2025. Nevertheless, the export market has failed to react strongly so far with only some small mills and traders targeting small rises, while in general market sources have remained cautious, not expecting near-term support for fundamentals.

At present, export offers for boron-added SS400 HRC given by major Chinese mills have remained at $495-500/mt FOB as “they have already been offering at a higher [level], so no big change,” a large trader said. At the same time, offers from small mills have been heard from $483-485/mt FOB to $490/mt FOB. This is only a slight improvement from $480-485/mt FOB targeted by most of them last week, but some sources said that mills and some traders previously sold some tonnages at $475/mt FOB, so the new offers are higher by up to $8/mt. “There is an improvement in sentiments, but I do not see a lot of real offers changing,” another Chinese source said.

In the main sales destination - Vietnam - offers have increased since the latest deals late last week, but, in fact, the majority of offers are the same as early last week. In particular, around 3,000 mt of Chinese Q235 HRC were traded at $490/mt CFR, while most offers for this grade are at $500-505/mt CFR at the moment. Most recent trades are for non-VAT material by traders, market sources said. And the activity in the SAE1006 HRC segment has been almost halted, with indicative offers at $515/mt CFR and some risky non-VAT indications at $505/mt CFR early this week. “We expect retroactive or preliminary duties to be imposed any time in Vietnam,” a source told SteelOrbis, commenting on the poor import activity.

Offers from Chinese suppliers to the Middle East, the UAE in particular, have increased to $530-545/mt CFR, versus $525-530/mt CFR in offers last week. While last week the tradable level in the UAE for Chinese coils was at $515/mt CFR, from Monday it will be at least $10/mt higher and Chinese suppliers may temporarily lose competitiveness. In particular, Japanese HRC has already been sold at $522/mt CFR to the UAE, according to market sources.

“Export offers declined $5/mt at the weekend and have rebounded now. I don’t think the uptrend will continue as we have entered the winter,” a large Chinese trader said.

During the given week, HRC prices in the Chinese domestic market have seen rises as China’s announcement a “moderately loose” monetary policy for 2025 on December 9 has bolstered market sentiments firmly. At the top economic meeting on Sunday, analysts observed a strong change in rhetoric regarding the easing of monetary policy, which last happened in 2011. No firm measures have been announced, but they are expected in January.

On December 10, HRC futures prices have indicated a rise of 1.89 percent compared to the previous trading day, exerting a positive impact on HRC prices. A wave of cold weather has hit China lately, weakening the support for HRC demand, while market participants expect stock replenishments from buyers in the near future. It is thought that HRC prices in the Chinese domestic market will likely edge up slightly in the coming week.

Domestic HRC prices in China are at RMB 3,620-3,670/mt ($503.5-510/mt) ex-warehouse on December 10, with the average price level RMB 20/mt ($2.8/mt) higher compared to that recorded on December 3, according to SteelOrbis’ data. 

As of December 10, HRC futures at Shanghai Futures Exchange are standing at RMB 3,549/mt ($494/mt), increasing by RMB 5/mt ($0.7/mt) since November 26, while up 1.89 percent compared to the previous trading day, December 9. 

$1 = RMB 7.1896