Chinese mills’ HRC export prices stable ahead of holiday, traders’ offers rebound slightly amid futures price recovery

This week, while most big Chinese mills have kept their HRC export prices stable, some rebound has been seen in offer prices from smaller mills and traders on the back of the recovery of HRC futures prices. At the same time, most market insiders expect more deals to be signed this week before Chinese suppliers leave the market for the long Lunar New Year holiday (January 28-February 4).

Specifically, export offers for boron-added SS400 HRC from large Chinese mills have settled at $465-470/mt FOB, with a midpoint at $467.5/mt FOB, down by $2.5/mt week on week but remaining at the same level as reported last Friday. Meanwhile, smaller mills have been offering their coils at $455-460/mt FOB, versus $445-450/mt FOB last week.

The tradable levels for ex-China SS400/Q235 HRC have been estimated at $455-458/mt FOB, versus $445-455/mt FOB last week. Offers for ex-China Q235 HRC in Vietnam have been estimated at around $470/mt CFR for February shipment, compared to deal prices at $460-465/mt CFR last week, though most bids have still been reported at $460/mt CFR, according to sources. Meanwhile, offers for ex-China Q195 HRC have been voiced at $460-462/mt CFR, up by $5-7/mt week on week.

Furthermore, offers for ex-China Q195 HRC from traders in Turkey have been estimated at $485-490/mt CFR, though several non-VAT offers are still reported at around $480/mt CFR, according to sources. Besides, buyers from the Gulf region have reported new offers from Chinese traders at $490-500/mt CFR, against $490/mt CFR last week, though talk about a deal for around 10,000-15,000 mt signed at $480/mt CFR UAE has been circulating in the market. “Almost all Chinese suppliers will leave the market from next week for the Chinese New Year holiday, so most deals could happen this week,” a Chinese trader told SteelOrbis.

In the meantime, average HRC prices in the Chinese domestic market have edged down compared to the previous week, though indicating a rebound over the past two days. Domestic HRC prices in China have settled at RMB 3,400-3,510/mt ($473-488/mt) ex-warehouse on January 14, with the average price level RMB 20/mt ($9.7/mt) lower compared to January 7, according to SteelOrbis’ data.

During the given week, HRC prices in the Chinese domestic market have declined compared to the previous week, while edging up since January 13 due to the increases in HRC futures prices this week. Production of HRC has declined, while inventory levels have increased, reflecting the slack demand from downstream users. Weak supply and low demand may continue in the HRC market, while market players still expect some restocking by downstream users ahead of the Chinese New Year holiday.

As of January 14, HRC futures at Shanghai Futures Exchange are standing at RMB 3,409/mt ($474/mt), increasing by RMB 66/mt ($9.2/mt) since January 7, while up 1.94 percent compared to the previous trading day, January 13.

$1 = RMB 7.1879