Chinese hot rolled coil (HRC) export offers have declined slightly compared to the price levels seen late last week. Moreover, additional discounts have been given to conclude deals. The rapid spread of the coronavirus worldwide and the sharp drop in oil prices have negatively affected the market.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $460-475/mt FOB for late May delivery, versus $460-480/mt FOB last week. At the same time, the latest deals have been heard at $455-460/mt FOB to Southeast Asia and South America. “Though the demand for HRC in the local market from downstream users has improved, it has not reached the normal levels for the same season in previous years, resulting in a more competitive situation in exports,” an international trader told SteelOrbis.
There have been reports in Vietnam that offers for hot rolled strip SS400 from China are already at $460-465/mt CFR, which corresponds to about $450/mt FOB. At the same time, prices for SAE1006 HRC from Japan and South Korea have been heard at $470-475/mt and $480/mt CFR Vietnam, signaling the severe competition in the market. Offers for ex-China SAE1006 HRC in Vietnam have not been heard at below $470/mt CFR so far.
Demand for HRC has improved in the local Chinese market, while domestic prices have softened slightly due to high inventories. Domestic HRC prices in China are at RMB 3,370-3,510/mt ($485.6-505.8/mt) ex-warehouse on March 10, with the average price level RMB 10/mt ($1.4/mt) lower as compared to March 3, according to SteelOrbis’ data.
As of March 10, HRC futures at the Shanghai Future Exchange are standing at RMB 3,479/mt ($501.3/mt), increasing by RMB 22/mt ($3.2/mt) or 0.95 percent since March 3.
$1 = RMB 6.9389
