Ex-China HRC offer prices have moved sideways though exporters have been more active in the overseas markets over the past week, facing some slowdown in the local demand.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $445-465/mt FOB for late August shipment, moving sideways on average compared to last week. Transaction activities in the local market have slowed down due to rainy weather and floods in China, while some steelmakers have been seeking opportunities in the export market.
Ahead of last week’s Dragon Boat Festival, two deals for ex-China SAE1006 HRC were heard at $448/mt CFR and $450/mt CFR Vietnam, each in the range of 10,000-20,000 mt. Also, about 5,000 mt of Chinese HRC was sold at $459/mt CFR to Pakistan. Chinese HRC has become more competitive compared to coils of other origins. Ex-India HRC has been offered at $450/mt CFR Vietnam, ex-South Korea HRC has been offered at $465/mt CFR and ex-Japan HRC at $470/mt CFR.
“Local demand for HRC has been slack, resulting in market players’ greater competitiveness in the export market,” an international trader told SteelOrbis.
During the given week, cautious sentiment has prevailed among market players. Meanwhile, some tightness has been seen in supply of HRC, bolstering HRC prices to some extent.
Domestic HRC prices in China are at RMB 3,730-3,740/mt ($527-528/mt) ex-warehouse on June 30, with the average price level RMB 10/mt ($7.1/mt) lower as compared to June 23, according to SteelOrbis’ data. As of June 30, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,603/mt ($509/mt), decreasing by RMB 25/mt ($3.5/mt) or 0.7 percent since June 23.
Demand for imported HRC has been slower in China this week as customers have not been ready to accept price increases. Indian mills have been offering at $450/mt CFR, while the previous deals were at $432-438/mt CFR and slightly above $440/mt CFR before the holidays. Moreover, about 20,000 mt of ex-Taiwan HRC have been traded at $450-460/mt CFR China.
$1 = RMB 7.0795