Ex-China HRC offer prices have moved down amid the prevailing bearish sentiments in the local market. As a result, a number of sales have been heard last and this week as Chinese coils have been cheaper than Indian, which allocation is lower.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $520-530/mt FOB, moving down by $5/mt on average compared to last week. The tradable value for SS400 has been assessed at $510-515/mt FOB early this week, taking into account deals to Vietnam and the workable level in Pakistan.
A few contracts for ex-China SS400 HRC have been done in the range of $518-525/mt CFR Vietnam last week, however, there have been no offers below $525/mt CFR from China at the moment. The tradable value for SS400 HRC from China in Pakistan has been heard at $530/mt CFR.
Also one of Chinese mills sold SAE1006 HRC to Vietnam at $535/mt CFR last week. Nevertheless, some shortage of material in the Vietnamese market and an increase announced by Formosa Ha Tinh has prevented prices from further decline so far. This week one contract from China for SAE1006 HRC has been reported at $540/mt CFR or slightly above.
In any case, offers of ex-India HRC have been at higher levels (around $545-550/mt CFR Vietnam) and overall supply volume has been visibly lower.
After some pause a cargo of Japanese HRC has been sold to Vietnam after discounts provided by the supplier. The deal has been signed at slightly below $550/mt CFR, while the initial offers have been at $560/mt CFR minimum.
“Downtrend in HRC futures prices and HRC prices in local market in China negatively affected ex-China HRC offer prices, and uncertainty prevailed among market players due to the quick declines and possible increasing inventory ahead of long National Day holiday (Oct 1-8), which will likely drag down ex-China HRC offer prices further and bring in more opportunities in the export market,” an international trader told SteelOrbis.
During the given week, HRC domestic prices in China have seen big decreases amid the decreasing trend in HRC futures prices and prevailing bearish sentiments. Meanwhile, sufficient HRC resources arrived at the spot market, while the demand has been slack, exerting a negative impact on the market. At the same time, inventory of HRC has indicated slight rises, weakening the support to HRC prices.
Domestic HRC prices in China are at RMB 3,920-3,940/mt ($573-578/mt) ex-warehouse on September 15, with the average price level RMB 65/mt ($9.5/mt) lower as compared to September 8, according to SteelOrbis’ data.
As of September 15, HRC futures at the Shanghai Future Exchange are standing at RMB 3,730/mt ($547/mt), decreasing by RMB 112/mt ($16.4/mt) or 2.9 percent since September 8.
$1 = RMB 6.8222