Chinese hot rolled coil (HRC) export offers have increased further in the past week, supported by a firm local market. However, the Chinese currency has appreciated to levels below 7.0 again, which will exert a negative impact on China’s exports. “Chinese mills have been less interested in exports as local HRC prices have been RMB 300/mt ($43/mt) higher than exports,” an international trader told SteelOrbis.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $475-485/mt FOB, increasing by $10/mt compared to December 10, while up $5/mt compared to December 16, though the price could be negotiated at up to $5/mt lower.
At the same time, HRC suppliers from other countries have been insisting on higher prices in Asia, in Vietnam in particular, following the hike made last week. Ex-India HRC SAE1008 has been offered from traders at $480-485/mt CFR Vietnam, up $10/mt compared to early December, while offers from Indian mills have been at $485-500/mt CFR. Ex-Japan HRC has been offered at $490/mt CFR Vietnam. However, purchasing activity is still low as bids have been coming mostly below $480/mt CFR.
The local Chinese market has moved up by a further slight margin, providing support for ex-China HRC offer prices. During the past week, domestic HRC prices in China have increased to RMB 3,740-3,970/mt ($534.5-567.4/mt) ex-warehouse, with the average price level RMB 15/mt ($2.1/mt) higher as compared to December 10, according to SteelOrbis’ data.
In the given week, inventory levels of HRC have continued to move down, resulting in tighter supply in the spot market, thereby bolstering HRC prices. However, demand has not seen any significant improvement.
$1 = RMB 6.997
