Chinese HRC exporters cautious after holiday, offers stable amid minor changes in HRC futures

The Chinese hot rolled coil (HRC) market has resumed work after its long holiday which started on October 1. However, although unusual for the start of a post-holiday period, HRC futures prices have shown no significant changes amid weak trading activity and a lack of expectation for any notable improvement.

Specifically, the price range for boron-added SS400 HRC from large Chinese mills has remained stable at $470–490/mt FOB, with a midpoint at $480/mt FOB, the same as ten days ago, though, according to sources, many producers have not refreshed their prices at all so far. Meanwhile, offers from smaller mills have been voiced mainly at $465-470/mt CFR, compared to $470/mt FOB in late September.

Meanwhile the tradable prices for ex-China SS400/Q235 HRC have settled at $465-475/mt FOB, depending on the destination, the same as before the holiday. In particular, ex-China 2,000 mm Q235/SS400 HRC offers in Vietnam have been voiced at $490-492/mt CFR, up by $2/mt since late September. However, most customers’ bids have been voiced at below $490/mt CFR, according to sources.

Meanwhile, Chinese offers to other destinations like the Middle East have remained at $500-505/mt CFR UAE, while Chinese Q195 HRC offers to Turkey have declined by around $2-3/mt to $497-503/mt CFR for November shipment.

In the meantime, average HRC prices in the Chinese domestic market have edged down slightly compared to the previous week amid the gradual cooling of expectations for the “silver October” traditional peak season. In particular, domestic HRC prices in China have settled at RMB 3,410-3,510/mt ($480-494/mt) ex-warehouse on October 10, with the average price level RMB 4/mt ($0.6/mt) lower compared to that recorded on September 30, according to SteelOrbis’ data.

During the given week, HRC prices in the Chinese domestic market have fluctuated within a limited range amid the impact of the long National Day holiday. Market players’ expectations for the “silver October” peak season have been gradually cooling, exerting a negative impact on the HRC market. Traders have mostly kept relatively low inventories, aiming to avoid potential risks. Some traders have preferred to wait and see if demand improves. It is thought that HRC prices in the Chinese domestic market will fluctuate within a limited range in the coming week, though they will likely rebound later amid the pick-up in post-holiday demand.

As of October 10, HRC futures at Shanghai Futures Exchange are standing at RMB 3,285/mt ($463/mt), increasing by RMB 32/mt ($4.5/mt) or 1.0 percent since September 30, while rising by 0.37 percent compared to the previous trading day, October 9. 

$1 = RMB 7.1055