Ex-China HRC offer prices have edged up slightly in the past week following the uptrend in the previous week amid the rises in local prices and unwillingness of some sellers to make export contracts ahead of expected changes in the export tariffs from August 1.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $970-1,030/mt FOB for September shipment, with a midpoint at $1,000/mt FOB, moving up by $10/mt on average compared to last week.
Offers for SS400 coils from smaller Chinese mills have been at $940-960/mt FOB lately, while the tradable level has been assessed at $930-940/mt FOB and only to some destinations, like South America. “Steelmakers have been seeking for opportunities in regions where prices have been much higher than in Asia, for instance, Latin America will likely be the export destination for China in the near future,” an international trader told SteelOrbis. The bid prices for SS400 coils from Vietnam are still below $900/mt FOB and negotiations have been halted.
Offers for SAE1006 HRC from Chinese small mills and traders have been reported at $950-970/mt FOB, but the tradable level in Vietnam is still at $925-930/mt CFR maximum and overall demand is very limited. “Demand is bad, but supply [from China] also dropped as traders are talking about duty to be announced from August. No one wants to risk,” a source from Vietnam said.
During the given week, domestic HRC prices have seen big rises amid the prevailing bullish sentiments due to the production restrictions. However, demand for HRC has been slack, resulting in low transaction activities. It is expected that HRC prices in the Chinese domestic market may move sideways in the coming week.
Domestic HRC prices in China are at RMB 5,820-5,920/mt ($877-899/mt) ex-warehouse on July 27, with the average price level RMB 110/mt ($17/mt) higher as compared to July 20, according to SteelOrbis’ data. Compared with the price level on Monday, July 26, average local quotations are RMB 25/mt ($3.9/mt) higher.
As of July 27, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,896/mt ($911/mt), decreasing by RMB 72/mt ($11.1/mt) or 1.2 percent since July 20.
$1 = RMB 6.4734
