Chinese HRC mills maintain export prices despite weaker mood locally amid futures fall

Although this week most Chinese HRC mills have continued to maintain their offers at unchanged levels, sentiments have been more negative than positive, as average HRC prices in the Chinese domestic market have decreased due to the slump in HRC futures prices following last week’s rises. Besides, sentiment has weakened due to the news about the imposition of antidumping duty in Vietnam, though Chinese suppliers have managed to secure some volumes for Q235 HRC, avoiding trade measures.

More specifically, offers for ex-China boron-added SS400 HRC from large mills have settled at $475-485/mt FOB, against $470-490/mt FOB last week, though the midpoint has remained at $480/mt FOB for mainly April shipment.

The tradable prices, however, have been fluctuating during the past week, with most offers standing by today, Tuesday, February 25, at $466-75/mt FOB, up by $5/mt week on week on the higher end of the range, but $3-5/mt lower since the previous day. In particular, ex-China Q235 HRC offers in Vietnam have settled at $478-482/mt CFR, following several deals done at $480-482/mt CFR yesterday and sales at $480-481/mt CFR on Friday, February 21, for at least 5,000 mt in total for Q235 2,000 mm. According to sources, ex-China 2,000 mm Q235 HRC is not subject to AD duty, as “only Chinese HRC below 1,800 mm has AD”.

“So, they [Chinese suppliers] found a way, but still Q235 HRC obviously cannot cover all needs, while Q195 and SAE1006 cannot use 2,000 m,” a Vietnamese trader told SteelOrbis.

Meanwhile, offers for ex-China Q195 HRC in Turkey have been voiced at $490-505/mt CFR, depending on the quantity and supplier, with the lower end of the range up by $3/mt week on week, but down by $5/mt since yesterday. Besides, offers for ex-China SS400 HRC in the Gulf region have been estimated at $505-510/mt CFR from mills, and at around $495-500/mt CFR from traders, mainly the same as last week.

In the meantime, average HRC prices in the Chinese domestic market have seen slight declines compared to the previous week amid decreasing HRC futures prices.  Domestic HRC prices in China have settled at RMB 3,440-3,530/mt ($480-492/mt) ex-warehouse on February 25, with the average price level RMB 3.3/mt ($0.5/mt) lower compared to that recorded on February 18, according to SteelOrbis’ data. 

According to sources, demand from downstream users has been quite good, while the imposition by several countries of antidumping duties on ex-China steel products has weakened market sentiments due to the prevailing panic. At the same time, inventory levels of HRC have increased due to the rising outputs after the long holiday. As the important government meetings to be held on March 4-5 are approaching, market players are still looking forward to a rebounding trend in HRC prices, though time will be needed to confirm such expectations.

As of February 25, HRC futures at Shanghai Futures Exchange are standing at RMB 3,376/mt ($471/mt), decreasing by RMB 54/mt ($7.5/mt) or 1.6 percent since February 18, while down 1.55 percent compared to the previous trading day, February 24.         

$1 = RMB 7.1726