Chinese HRC exporters attempt further price rises amid hikes locally and better overseas demand

Ex-China hot rolled coil (HRC) offer prices have edged up amid the rising trend of local and futures prices coupled with the increased strength of the Chinese currency against the US dollar. Besides, the tradable prices have increased as well in new deals to different destinations given better demand in many regions.

At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $620-630/mt FOB for February and March shipments, with a midpoint at $625/mt FOB, up by $22.5/mt week on week. “Not only have big mills increased their offers significantly, but also smaller ones. Anfeng, for instance, is offering at $610/mt FOB, which is around $15/mt higher from last week,” a market insider told SteelOrbis.

Meanwhile, the tradable level for SS400 HRC has been heard at $600-610/mt FOB, up by $10/mt week on week. Besides, according to market sources, numerous batches of small tonnages have been sold at $600-605/mt FOB to such destinations as the Middle East, South Korea and South America. In particular, ex-China SS400 HRC offers to the Middle East have been reported at $650-660/mt CFR, up by $20/mt week on week, with a few deals reported at $650/mt CFR level. Furthermore, after over 100,000 mt of ex-China Q125 coils were sold to Turkey at $635-645/mt CFR last week, new offers have been assessed at $650/mt CFR and above, and, according to sources, more contracts are on the way. Meanwhile, higher offers for ex-China SS400 at $620/mt CFR to Vietnam have been failing to attract the interest of buyers, who were still bidding at $610-615/mt CFR. “Following the increase in Formosa’s domestic prices to $635/mt CFR for SS400 coils, traders do not what to go lower than $620/mt CFR and refuse lower bids,” a Chinese trader said.

In the SAE1006 HRC segment trade activity has been slow so far following numerous deals signed during the past weeks with Vietnamese customers. Most offers to Vietnam have settled at $640/mt CFR, up by $10-20/mt week on week. Offers for ex-China SAE1006 HRC to Pakistan have been reported at around $650/mt CFR.

At the same time, during the given week, HRC prices in the Chinese domestic market have indicated rises as supply of HRC shrank since HRC producers have implemented maintenances in the winter. However, demand for HRC has been slack as it is getting closer to the Chinese New Year holiday (January 21-27) and downstream enterprises have gradually been starting to leave for the holiday.

Domestic HRC prices in China are at RMB 4,080-4,190/mt ($604-620/mt) ex-warehouse on January 10, with the average price level RMB 64/mt ($9.5/mt) higher than that recorded on January 3, according to SteelOrbis’ data.

As of January 10, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,166/mt ($616/mt), increasing by RMB 67/mt ($10.0/mt) or 1.63 percent since January 3.

  $1 = RMB 6.7611