Ex-China HRC offer prices have moved up significantly amid surging local prices, supported by demand and by supply which is not at high levels. The good outlook for consumption in April has pushed up rising ferrous metal futures prices. As the final announcement of the anticipated tax rebate cut has still not been made, sellers from China gave higher export prices and still talk of sharing risks with buyers.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $870-880/mt FOB for May shipment, with a midpoint at $875/mt FOB, moving up by $55/mt on average compared to March 30. The tradable price level has been still lower, at $780-790/mt FOB, which is, however, $20-25/mt above the tradable level from China to Asia last week.
A deal, according to sources, for rerolling ex-China SAE 1006 grade HRC was done at $860/mt CFR Vietnam last week. Some offers from traders for the same grade to Pakistan were also heard at $850/mt CFR. All suppliers agree to sell only by evenly sharing the risks of the possible export tax rebate cut with buyers.
However, offers for rerolling SAE1006 HRC from China have been reported at a higher level early this week, up to $920-950/mt CFR Vietnam. Offer prices of ex-India SAE1006 HRC to Vietnam have increased to $900-920/mt CFR Vietnam, following deals at $880/mt CFR late last week.
“HRC prices [in the local market] have seen further rises amid increasing ferrous futures and demand, while HRC offer prices from other origins in the export market have also seen rises, though buyers and sellers in the export market still await accurate news on the export tax rebate,” an international trader told SteelOrbis.
During the given week, China’s local HRC prices have risen sharply amid the prevailing bullish sentiments, while buyers have been unwilling to accept the relatively high level of HRC prices. Inventory of HRC has not indicated big changes and is still at relatively low levels and will provide support for prices. It is thought that HRC prices in the Chinese domestic market will edge up in the coming week.
Domestic HRC prices in China are at RMB 5,550-5,610/mt ($847-856/mt) ex-warehouse on April 6, with the average price level RMB 275/mt ($42/mt) higher as compared to March 30, according to SteelOrbis’ data. Compared with the price level on Friday, April 2, local quotations are RMB 95/mt ($14.5/mt) higher. This means that prices have reached a new record high since the middle of 2008.
As of April 6, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,566/mt ($849/mt), increasing by RMB 194/mt ($29.6/mt) or 3.61 percent since March 30.
$1 = RMB 6.5527