Chinese HRC exporters to raise prices amid stronger local market, higher offers from competitors

Tuesday, 05 November 2019 17:10:17 (GMT+3)   |   Shanghai

During the week ending November 5, Chinese hot rolled coil (HRC) export offers have moved sideways, though mills are preparing for an increase, seeing positive signs from both the local and international markets.

At present, export offers for boron-added SS400 HRC given by Chinese mills are at $425-455/mt FOB. Alhough the average price is still $440/mt FOB, most steelmakers have given fresh offers for December shipment at $440-450/mt FOB, while it is hard to find offers from mills at $430/mt FOB and below, sources said.

Indian mills, the major competitors of China in Asia, have started to increase prices since last week, while there was a deal for ex-India coils at $422/mt CFR Vietnam signed recently, according to sources. The level is still too low for Chinese suppliers, and so their prices are still uncompetitive, but it signals that bids have increase in Asia as ten days ago Vietnamese customers were not ready to buy at higher than $410-415/mt CFR. Bid prices from Pakistan have increased as well and have been heard at $435-440/mt CFR.

Moreover, HRC prices in the local Chinese market have edged up slightly for thick specifications due to comparatively low inventory levels and rises seen in HRC futures prices. At the same time, Hesteel has raised HRC prices by RMB 200/mt ($28.4/mt) on November 5 for November. The People's Bank of China launched RMB 400 billion medium-term lending facility (MLF) operations on November 5, aiming to lower financial cost, stabilize and expand domestic demand, which has respectively pushed up rebar and HRC futures prices at Shanghai Futures Exchange by 1.75 percent and 1.11 percent on November 5 compared to the previous trading day.

As of November 5, domestic HRC prices in China are standing at RMB 3,520-3,630/mt ($500-516/mt) ex-warehouse, with the average price level up RMB 10/mt ($1.4/mt) compared to October 29, having risen by RMB 5/mt ($0.7/mt) compared to November 4.

Nevertheless, “more low-priced HRC offers from South Korea and India have been heard in China, negatively affecting market players’ sentiments in the HRC market,” an international trader told SteelOrbis.

$1 = RMB 7.038

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