Ex-China HRC offers edge up from mills, export sentiment remains cautious

Over the past week, ex-China hot rolled coil (HRC) offers from major mills and traders have edged up, while tradable prices have remained relatively stable. At the same time, according to most market insiders, “the export market has remained difficult to assess”, but most mills have been aiming for an HRC base price at around $490/mt FOB.

Specifically, export offers for boron-added SS400 HRC from large Chinese mills have moved to $490-495/mt FOB, with a midpoint at $492.5/mt FOB, up by $7.5/mt week on week. Meanwhile, smaller mills have been offering their HRC at around $480-490/mt FOB compared to $480/mt FOB last week, though occasional offers from small non-VAT Chinese mills are still voiced at lower levels of around $475/mt FOB, the same as last week, according to sources.

Meanwhile, the tradable price for ex-China HRC from traders has settled at $475-485/mt FOB, depending on the destination, the same as last week. In particular, according to sources, ex-China Q235 HRC in Vietnam stands at $487/mt CFR the same as last week. Besides, offers for ex-China Q235 in Pakistan have remained at around $495/mt CFR.

Besides, Chinese offers for Q195 HRC in Turkey have settled at $503-515/mt CFR, versus $500-520/mt CFR week. Meanwhile, most offers for Q235 HRC in the Middle East have been voiced at $500-510/mt CFR UAE, mainly the same as last week.

In the meantime, average HRC prices in the Chinese domestic market have increased slightly compared to the previous week amid fluctuating HRC futures prices. In particular, domestic HRC prices in China are at RMB 3,510-3,720/mt ($491.5-521/mt) ex-warehouse on August 5, with the average price level RMB 3/mt ($0.4/mt) higher compared to that recorded on July 29, according to SteelOrbis’ data. 

“The market continues to follow its old playbook: reduced competition is supporting prices, keeping the uptrend intact and setting a higher platform for August. Even in what is typically a slower season, the momentum remains strong, and the market shows little sign of cooling,” a market insider told SteelOrbis.

During the given week, heavy rains in some regions of China negatively affected the HRC market. There was a limited demand release for HRC in the traditional off-season, exerting a negative impact on its prices. HRC futures prices moved down sharply late last week, while they have rebounded this week, bolstering market sentiments gradually. Some market players have raised their HRC prices slightly this week, while transaction activities have also improved slowly. News of inspections of overproduction in the coking coal industry pushed up HRC futures prices on August 5. It is thought that HRC prices in the Chinese domestic market will likely indicate a rebounding trend in the coming week.

As of August 5, HRC futures at Shanghai Futures Exchange are standing at RMB 3,457/mt ($484/mt), decreasing by RMB 46/mt ($6.4/mt) or 1.3 percent since July 29, while increasing by 1.89 percent compared to the previous trading day, August 4.          

 $1 = RMB 7.1366