Export activity for Chinese hot rolled coil (HRC) has remained slow over the past week, with buyers and sellers struggling to close the bid-offer gap. At the same time, export offers from both mills and traders have edged slightly lower, tracking the declines in domestic HRC prices and the ongoing volatility in Chinese HRC futures prices.
Specifically, export offers for boron-added SS400 HRC from large Chinese mills have moved to $485-490/mt FOB, with a midpoint at $487.5/mt FOB, down by $5/mt week on week, while offers from smaller mills have been voiced at around $480-485/mt FOB, down by $5/mt on the higher end of the range over the past week.
Meanwhile, the tradable price for ex-China HRC from traders has settled at $480-486/mt FOB, depending on the destination, down by $4/mt on the higher end of the range week on week. In particular, according to sources, ex-China Q235 HRC in Vietnam stands at $499-500/mt CFR, the same as at the end of last week, while offers for ex-China SAE1006 HRC have been estimated at around $520/mt CFR. Besides, offers for ex-China Q235 in Pakistan have been voiced at $495/mt CFR, down by $5/mt week on week.
Furthermore, Chinese offers for Q195 HRC in Turkey have settled at $515-520/mt CFR, the same as last week, with talk about a deal signed at $515/mt CFR circulating in the market, though this information has not been confirmed by the time of publication.
At the same time, most offers for SS400 HRC in the Middle East have been voiced at $515-520/mt CFR, with a deal for around 25,000 mt reportedly signed this week at $514/mt CFR for pipe-making grade HRC for October shipment. Besides, offers for ex-China SAE1006 HRC offers have been voiced at $525/mt CFR, down by $10/mt week on week.
Market participants have pointed to uncertainty over whether shipments without value-added tax (VAT) would face tighter controls, further discouraging deals. “Mills are not taking new orders at present, as most could only schedule deliveries toward late September. Overseas demand also stayed weak, with traders citing limited interest and resistance to higher prices,” a Chinese trader told SteelOrbis.
Meanwhile, average HRC prices in the Chinese domestic market have moved down compared to the previous week amid decreasing HRC futures prices and slack demand from downstream users. In particular, domestic HRC prices in China have settled at RMB 3,520-3,740/mt ($493-524/mt) ex-warehouse on August 19, with the average price level RMB 30/mt ($4.2/mt) lower compared to that recorded on August 12, according to SteelOrbis’ data.
During the given week, HRC futures prices have declined, exerting a negative impact on the prices in the spot market. Demand from downstream users has been sluggish due to the ongoing high temperatures, weakening the support for HRC prices. However, production cuts will be implemented from August 20 in Tangshan, the major steelmaking hub in Hebei Province, which will reduce outputs and bolster steel prices to a certain degree.
As of August 19, HRC futures at Shanghai Futures Exchange are standing at RMB 3,484/mt ($484/mt), decreasing by RMB 68/mt ($9.5/mt) or 2.0 percent since August 12, while increasing by 1.4 percent compared to the previous trading day, August 11.
| Product | Spec | Quality | City | Origin | Price（RMB/mt） | W-o-w change |
| HRC | 5.75mm*1500*C | Q235B/SS400 | Shanghai | Angang | 3,740 | -20 |
| Tianjin | Baotou Steel | 3,520 | -30 | |||
| Lecong | Liuzhou Steel | 3,570 | -40 | |||
| Avg | 3,610 | -30 | ||||
| HRC | 2.75mm*1250*C | Q235B | Shanghai | Angang | 3,850 | -20 |
| Tianjin | Baotou Steel | 3,580 | -30 | |||
| Lecong | Angang | 3,650 | -40 | |||
| Avg | 3,693 | -30 |
$1 = RMB 7.1359