Chinese hot rolled coil (HRC) prices have posted a visible drop early this week as the trade war between China and the US intensified, hitting sentiments in the local market, while the supply-demand imbalance might even worsen at the beginning of September amid softer production restrictions and still insufficient demand.
Mills have been offering SS400 HRC (3 mm and above) at $470-475/mt FOB, $5-10/mt below the last week’s levels, SteelOrbis has been informed. Moreover, market sources have been saying that prices may touch $460-465/mt FOB very soon.
The Sino-US trade friction, which escalated late last week, have weighed on sentiments in the local market and, as a result, demand stayed at low levels. Moreover, the Tangshan authorities have said that production restrictions will be eased till September 26, which has put pressure on domestic HRC tags. In Shanghai, prices have lost RMB 120/mt ($17/mt) over the week, coming to RMB 3,610/mt ($510/mt) ex-warehouse, while in Tianjin they have moved down by RMB 50/mt ($7/mt) to RMB 3690/mt ($521/mt) ex-warehouse, according to SteelOrbis’ information.
Moreover, the tightening of competition in the international market has hit export prices from China. Following Indian sellers, traders have started to offer Chinese HRC with discounts to Vietnam, at $475-480/mt CFR (about $460-465/mt FOB). But at the same time, prices for Indian coils have also slipped further and touched $465/mt CFR, while bids from Vietnam have started to come at about $460/mt CFR
$1 = RMB 7.08