Chinese mills have this week again decided to cut their export prices for hot rolled coils (HRC), for October shipment. Offers from a number of producers for SS400 HRC have been heard at $460-465/mt FOB, $10/mt lower than last week’s level, according to SteelOrbis’ information.
As a result of the decline, customers in Pakistan have received offers at $480/mt CFR and slightly below, buyers in Vietnam have reported offers coming from China at $470-475/mt CFR. Nevertheless, there has been no information about deals yet. In Vietnam, importers can still get prices a bit lower from Russia and India, at $460-465/mt CFR.
The main reason for the further drop in Chinese HRC export prices has been weak demand and not very bright expectations for the whole of September. Moreover, Chinese suppliers have been having some space for a decrease, even with current reduced margins, sources said. Even the rebound seen in the local Chinese market has failed to support export prices.
During the week ending September 3, average hot rolled coil (HRC) prices in the Chinese domestic market have edged up by RMB 33/mt ($5/mt) compared to the previous week, while activity in the market has been at low-to-medium levels. The price increase has been highest in Shanghai, rising by RMB 60/mt ($8.5/mt) to RMB 3,670/mt ($518/mt) ex-warehouse.
Average HRC prices in the local Chinese market are presented in the following table.
|
Product name |
Specification |
Category |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
|
5.75 mm x 1,250 mm x C |
Q235B/SS400 |
3,710 |
+33 |
523 |
+5 |
|
|
2.75 mm x 1,250 mm x C |
Q235B |
3,826 |
+33 |
540 |
+5 |
13 percent VAT is included in all prices and all prices are ex-warehouse.
Local HRC prices in China have rebounded reacting to the jump in iron ore prices, which broke through the $90/mt CFR mark on Monday, August 2. Iron ore futures prices at Dalian Commodity Exchange (DCE) have seen a sharp rise of 7.2 percent over the week. Market participants have started to be bullish on the future prospects for the HRC market. In order to ensure clean air for the 70th anniversary of the establishment of the People’s Republic of China, environmental protection measures have been implemented in China, boosting market players’ confidence. However, due to the rainy weather in the coming week, demand for HRC will unlikely see significant improvement, preventing any further significant price increase.
$1 = RMB 7.09