Ex-China HRC offers see mild rebound, trade still subdued amid weak demand

Although a slight increase in ex-China HRC offers was observed at the beginning of the week, supported by a modest rebound in HRC futures prices, most Chinese HRC suppliers have remained quiet in terms of export sales. At the same time, the most competitive offers from traders have been heard at $455/mt FOB, which is mostly unchanged from last week. Meanwhile, average HRC prices in the Chinese domestic market have edged down compared to the previous week amid pressure from the demand side.

More specifically, offers for ex-China boron-added SS400 HRC from large mills have settled at $465-470/mt FOB, with a midpoint at $467.5/mt FOB, up by $2.5/mt week on week, though, according to sources, some mills have been aiming for $495/mt FOB, while most market insiders estimate this level as “totally uncompetitive and out of the market”. Meanwhile, offers from smaller mills have been voiced at $455-460/mt FOB, up by $5/mt on the lower end of the range week on week.

The tradable prices have been reported at $455-460/mt FOB, the same as last week. In particular, ex-China 2,000 mm Q235 HRC offers in Vietnam have settled at $472-475/mt CFR for end-of-June shipment, the same as at the end of last week. Besides, offers for ex-China SAE1006 HRC have been heard at $485-490/mt CFR for end-of-June shipment.

Meanwhile, offers for ex-China SS400 HRC to the Middle East have been estimated at $495-505/mt CFR, the same as a week ago, while offers for ex-China SAE1006 HRC have been estimated at $520/mt CFR UAE. Besides, offers from China for Q195 HRC in Turkey have settled at $490-495/mt CFR.

During the given week, the shock from the tariff issue between the US and China has eased to a certain degree, while supply of HRC has been at relatively high levels, exerting a negative impact on prices. Meanwhile, inventory consumption has slowed down, reflecting pressure on demand.

On April 15, domestic HRC prices in China have settled at RMB 3,350-3,540/mt ($465-492/mt) ex-warehouse, with the average price level RMB 7/mt ($1/mt) lower compared to that recorded on April 8, and down by RMB 10/mt ($1.5/mt) since yesterday, according to SteelOrbis’ data.

As of April 15, HRC futures at Shanghai Futures Exchange are standing at RMB 3,236/mt ($449/mt), increasing by RMB 33/mt ($4.6/mt) or 1.0 percent since April 8, while down 0.34 percent compared to the previous trading day, April 14.         

$1 = RMB 7.2096