Chinese HRC export trade muted due to holiday lull, prices show no firm direction

Chinese hot rolled coil (HRC) export activity has entered a holiday lull, with only sporadic inquiries and trades taking place, while most suppliers have closed the last trading day of 2024 with a focus on price stability and many are hopeful for an improved outlook in 2025. At the same time, following a slight increase in HRC futures prices yesterday, as of today, December 31, futures prices have rolled back again slightly, with a number of traders again ready to provide additional discounts.

More specifically, export offers for boron-added SS400 HRC from large mills at $475-490/mt FOB, with a midpoint at $482.5/mt FOB for February shipment, up by $2.5/mt week on week. Such a slight increase has mainly been attributed to higher prices from large mills in the north amid the recovery of futures prices yesterday on December 30, though most market insiders estimate large mills’ offers at not higher than $475-480/mt FOB. Meanwhile, smaller mills have been offering their coils at around $470-475/mt FOB, the same as last week.

The tradable price for ex-China SS400/Q235 HRC has been estimated at $470-475/mt FOB, against $470-480/mt FOB at the beginning of last week. Offers for ex-China Q235 HRC in Vietnam have remained at $480-485/mt CFR levels, the same as deal prices reported last week, while offers for Chinese SS400 HRC in the Middle East have been estimated at $475/mt FOB, down by $5/mt week on week, or at around $510-515/mt CFR.

“Overall sentiment and market activity has remained steady, with prices holding firm. Winter stockpiling continues to be uncertain, leaving the Chinese market in a delicate balance between supply and demand, without significant inventory pressure,” a market insider said.

In the meantime, domestic HRC prices in China have settled at RMB 3,510-3,570/mt ($488-496.5/mt) ex-warehouse on December 31, with the average price level RMB 3/mt ($0.4/mt) lower compared to that recorded on December 24, according to SteelOrbis’ data.

During the given week, HRC prices in the Chinese domestic market have fluctuated within a limited range amid the slight declines in HRC futures prices. Tomorrow is the New Year holiday on January 1, which contributes to slacker demand for HRC. At the same time, steelmakers’ insufficient production cuts for HRC may weaken the support for prices.

As of December 31, HRC futures at Shanghai Futures Exchange are standing at RMB 3,418/mt ($475/mt), decreasing by RMB 13/mt ($1.8/mt) since December 24, while down 0.09 percent compared to the previous trading day, December 30.

$1 = RMB 7.1884