Ex-China HRC prices have remained stable in the past week and the trading has been still very limited due to weak demand in ASEAN and other markets, too high offers voiced by Chinese mills and uncertainties regarding the new export duty that may be announced next week. At the same time, Chinese HRC sellers have focused on the local market, where prices have reached a bottom on Friday and have started to gradually increase early this week.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $950-1,020/mt FOB for October shipment, with a midpoint at $985/mt FOB, remaining stable on average compared to last week. “Demand in the export market will remain slack, while China will unlikely reduce their offer prices,” an international trader told SteelOrbis, adding that some changes in the trading activity is possible only in September-October.
The tradable price level for SS400 coils has been heard at $910-920/mt FOB lately, down by $10/mt over the week mainly because of the worsening the demand situation in the major outlets.
The workable price level for SAE1006 HRC from Chinese small mills and traders has been reported at $920-930/mt FOB as the lowest, which is out of any interest of buyers in Asia. Buyers in Vietnam may start to build up stocks only when the Covid-19 pandemic becomes better, sources believe. For now, the lowest offers for import HRC (SAE1006) are coming from Russia at $880/mt CFR, while traders are trying to invite bids at $860/mt CFR Vietnam.
During the given week, China’s local HRC prices have seen certain declines amid the decreasing HRC futures prices and the weakening sentiments among market players. Demand for HRC has been slack, while it is unlikely to see improvement in the short term. However, on Monday-Tuesday, domestic prices in China have seen some rebound, connected with higher futures.
Domestic HRC prices in China are at RMB 5,580-5,720/mt ($861-883/mt) ex-warehouse on August 24, with the average price level RMB 70/mt ($10.8/mt) lower as compared to August 17, according to SteelOrbis’ data. Compared with the price level on Monday, August 23, average local quotations are RMB 15/mt ($2.3/mt) higher.
As of August 24, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,604/mt ($865/mt), decreasing by RMB 122/mt ($18.8/mt) or 2.1 percent since August 17.
$1 = RMB 6.4805