Ex-China HRC offers stable, but discounts appear in traders’ offers

Although HRC prices in the Chinese domestic market have continued to increase over the past week amid rising HRC futures prices and improved demand due to stock replenishments ahead of the long holiday, ex-China HRC prices from most major mills and traders have remained relatively stable during the past week and some traders have even decided to provide additional discounts to attract buyers.

Specifically, export offers for boron-added SS400 HRC from large Chinese mills have moved to $480-490/mt FOB, with a midpoint at $485/mt FOB, the same as last week, while offers from smaller mills have remained at around $475-485/mt FOB.

The tradable price for ex-China HRC from traders has settled at $470-480/mt FOB, depending on the destination, compared to $475-478/mt FOB last week. In particular, ex-China Q235/SS400 HRC, 1,900-2,000 mm offers in Vietnam have been voiced at $497-500/mt CFR for November shipment, compared to $493-500/mt CFR last week. Besides, offers for Q195 HRC, 3,000 mm, have settled at $490/mt CFR for October shipment.

Meanwhile, Chinese offers to other destinations like the Middle East have settled at $510/mt CFR UAE, mainly the same as last week, though a few deals are reported to have been done at $500-505/mt CFR UAE, compared to 510/mt CFR last week. Besides, although Chinese Q195 HRC offers to Turkey have remained at $515-520/mt CFR, market insiders estimate the workable levels at $505-510/mt CFR.

At the same time, during the given week, HRC futures prices have moved on an uptrend, exerting a positive impact on HRC prices in the Chinese domestic market. In particular, domestic HRC prices in China have settled at RMB 3,470-3,710/mt ($489-523/mt) ex-warehouse on September 16, with the average price level RMB 33/mt ($4.6/mt) higher compared to that recorded on September 9, according to SteelOrbis’ data. 

Market sentiments have improved in the traditional peak season, bolstering HRC prices. Moreover, stock replenishments ahead of the National Day holiday (October 1-8) have also provided solid support for HRC prices. Recently, coking coal and coke prices have seen increases, pushing up production costs of HRC and positively affecting its prices. It is expected that HRC prices in the Chinese domestic market will move up further in the coming week.

As of September 16, HRC futures at Shanghai Futures Exchange are standing at RMB 3,402/mt ($472/mt), increasing by RMB 53/mt ($7.5/mt) or 1.6 percent since September 9, while increasing by 1.25 percent compared to the previous trading day, September 15.

$1 = RMB 7.1027