Ex-China HRC offer prices have moved down in the past week following the sharp losses seen in the local market, caused by weaker futures prices and reduced demand.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $930-950/mt FOB for December shipment, with a midpoint at $940/mt FOB, moving down by $20/mt over the past week. “The downtrend of HRC futures prices has weakened the support for local HRC prices and for ex-China HRC offers,” an international trader told SteelOrbis.
The tradable price level for SS400 coils has been heard at $910/mt FOB lately, down from $920-930/mt FOB a week before.
The workable price level for SAE1006 HRC from Chinese small mills and traders has been reported at $915-925/mt FOB, down by $15/mt on average. But this price level has still not been acceptable to most customers, who have hardly been bidding at this level even on CFR basis.
During the given week, HRC futures prices have indicated sharp declines as China stressed that it will reduce crude steel output during the remainder of the current year, while demand is also under pressure, exerting a negative impact on the steel market. Downstream users mostly hold a cautious attitude towards the future prospects for the HRC market, while overall consumption has been lower this October than for last year as re-rolling mills have been asked to cut operations to limit energy use. It is expected that HRC prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.
Domestic HRC prices in China are at RMB 5,500-5,590/mt ($861-875/mt) ex-warehouse on October 26, with the average price level RMB 230/mt ($36/mt) lower as compared to October 19, according to SteelOrbis’ data. Compared with the price level on Monday, October 25, average local quotations are RMB 30/mt ($4.7/mt) lower.
As of October 26, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,236/mt ($819.4/mt), decreasing by RMB 500/mt ($78.3/mt) or 8.7 percent since October 19.
$1 = RMB 6.389
