Chinese export hot rolled coil (HRC) market sentiment has continued to deteriorate for a second consecutive week, as further declines in HRC futures and slight weakening in the domestic market have weighed on confidence among both mills and traders. Market participants have attributed the softer domestic sentiment largely to sluggish demand caused by adverse weather conditions, particularly persistent rainfall in several key steel-consuming regions of China. As a result, although most suppliers have attempted to maintain offer levels, growing pressure from the local market and cautious buying interest in overseas destinations have led to increasing flexibility in negotiations and a gradual downward adjustment in export prices.
More specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $518-535/mt FOB, with a midpoint at $526.5/mt FOB, down by $1.5/mt since last week. Besides, offers from smaller private mills have been voiced at around $505-520/mt FOB, down by $5-10/mt week on week. “Offers from Yanshan have still been heard at the $535/mt FOB level, while other mills like Anshan, Benxi, and Rizhao have been offering HRC at $520/mt FOB. Besides, offers from Anfeng have been reported at the $505/mt FOB level,” a market insider told SteelOrbis.
At the same time, offers from Chinese traders have been estimated at $505-515/mt FOB, mainly unchanged from last week. According to sources, this week ex-China 2,000 mm Q235 HRC offers in Vietnam have remained extremely rare, with indicative offers including VAT for July shipments voiced at $525/mt CFR, the same as last week, but offers for non-VAT Q235 have appeared in the market at $515/mt CFR Vietnam, according to sources.
Offers for ex-Chinese Q195 HRC through traders to Turkey have been voiced at $555-560/mt CFR, versus $555-565/mt CFR last week. Besides, indicative offers from Chinese traders have been estimated in the UAE market at around $580-590/mt CFR, down by $5/mt on the higher end of the range week on week, with the freight rate estimated at around $70/mt.
Meanwhile, average HRC prices in the Chinese domestic market have followed a downtrend compared to the previous week amid declining HRC futures prices and the prevailing wait-and-see stance among market players. In particular, domestic HRC prices in China have settled at RMB 3,450-3,530/mt ($505-517/mt) ex-warehouse on May 27, with the average price level being RMB 40/mt ($5.9/mt) lower compared to that recorded on May 20, according to SteelOrbis’ data.
During the given week, HRC futures prices have continued their downtrend, exerting a negative effect on spot market prices. The supportive effect from the significantly rising coking coal and coke futures prices due to the mining disaster that happened in Shanxi Province has gradually faded away. Market players mostly held a wait-and-see stance regarding the future prospects for the HRC market. Moreover, the widespread rainy weather exerted a negative impact on demand for HRC. It is thought that HRC prices in the Chinese domestic market will soften in the coming week.
As of May 27, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,363/mt ($492/mt), decreasing by RMB 55/mt ($8.1/mt) or 1.6 percent since May 20, while decreasing by 0.50 percent compared to the previous trading day, May 26.
| Product | Spec | Quality | City | Origin | Price（RMB/mt） | W-o-w change |
| HRC | 5.75mm*1500*C | Q235B/SS400 | Shanghai | Angang | 3,530 | -10 |
| Tianjin | Baotou Steel | 3,450 | -30 | |||
| Lecong | Liuzhou Steel | 3,530 | -80 | |||
| Avg | 3,503 | -40 | ||||
| HRC | 2.75mm*1250*C | Q235B | Shanghai | Angang | 3,640 | -10 |
| Tianjin | Baotou Steel | 3,510 | -30 | |||
| Lecong | Angang | 3,610 | -80 | |||
| Avg | 3,587 | -40 |
$1 = RMB 6.8291
