Chinese HRC export prices stable after holiday, but to soften amid expected higher output

Tuesday, 08 October 2019 15:54:26 (GMT+3)   |   Shanghai
       

During the week ending October 8, Chinese hot rolled coil (HRC) export offers have remained unchanged. At present, export offers for boron-added SS400 HRC given by Chinese mills are at $450-460/mt FOB. “Sentiments in the export market are still quiet following the long holiday, while prices are expected to fall to compete with offer prices from other countries.” an international trader told SteelOrbis. Moreover, there has been some slight decline in the local market on the first working day and market participants expect an increase in production in the coming weeks following the strict measures implemented to ensure clean air for the holidays. As a result, export prices may decline as well.

During the past week, domestic HRC prices in China have increased on the upper end to RMB 3,620-3,740/mt ($513-529/mt) ex-warehouse, with the average price level RMB 5/mt higher as compared to September 26 until today, Tuesday, October 8, when local prices lost RMB 10/mt ($1.4/mt) compared to the previous trading day, September 30. Meanwhile, HRC futures prices in China have declined by 1.84 percent on October 8 compared to September 30, to RMB 3,416/mt ($483/mt).

During the long holiday period, inventories of HRC have increased slightly in China, exerting a negative impact on market sentiment, while inventory levels are expected to continue to rise when loading and transportation resume their normal pace. 


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