Ex-China HRC offers up from mills, traders’ offers stable with sizeable volumes sold to Turkey

Chinese HRC export offers from big mills have increased this week, supported by higher domestic prices and a rebound in HRC futures prices. Nevertheless, traders’ offers have remained largely stable amid weak demand in most overseas markets. While relatively large volumes are reported to have been concluded to Turkey, demand in other key destinations has remained sluggish, keeping overall export activity uneven.

More specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $490-500/mt FOB, with a midpoint at $495/mt FOB, up by $10/mt week on week. Besides, offers from smaller private mills have been voiced at around $485-495/mt FOB, compared to $480/mt FOB last week. “Offers are varying from mill to mill, with the prices from such mills as Shougang, Anshan, Hebei Zongheng and Anfeng heard at $490-495/mt FOB, while a few mills have increased offers to $500/mt FOB and even $510/mt FOB has already been voiced from Yanshan,” a market insider told SteelOrbis.

Meanwhile, offers from Chinese traders have been estimated at $480-490/mt FOB, the same as last week. Ex-China 2,000 mm Q235 HRC offers in Vietnam are still rare due to the absence of non-VAT offers, with indicative offers with VAT for May shipment voiced at $500-505/mt CFR, mainly the same as last week. However, a deal prices for ex-China Q195 HRC has been reported at $491/mt CFR Vietnam, according to sources.

Furthermore, offers for ex-China Q195 HRC in Pakistan have been estimated at $505/mt CFR for May shipment, the same as last week, while offers for Q235 and SAE1006 HRC have settled at $512/mt CFR and $535/mt CFR, respectively.

Chinese Q195 HRC offers through traders to Turkey have been estimated at $535-545/mt CFR, mainly the same as last week, which translates to around $480-490/mt FOB, given that the freight rates have increased significantly this week due to the escalation of the war in the Middle East. At the same time, market sources report that several deals for Chinese HRC were concluded in Turkey at the end of last week. At least one cargo of around 50,000 mt is reported to have been sold at $477-483/mt FOB, equivalent to approximately $538/mt CFR. In addition, market participants indicate that another cargo may have been sold at $480-485/mt FOB.

In the meantime, most Chinese mills are still not issuing new export offers to Gulf buyers as freight conditions and insurance coverage for vessels transiting the Strait of Hormuz remain unclear. In Saudi Arabia, Chinese 1.2 mm HRC was reported to be offered at around $580/mt CFR Jeddah, while the country has been looking to redirect cargoes from the eastern province and other GCC ports to alternative Saudi ports along the Red Sea coast, according to market reports.

Meanwhile, average HRC prices in the Chinese domestic market have moved on an uptrend compared to the previous week amid rising HRC futures prices. In particular, domestic HRC prices in China have settled at RMB 3,360-3,420/mt ($487-496/mt) ex-warehouse on March 24, with the average price level RMB 17/mt ($2.5/mt) higher compared to that recorded on March 17, according to SteelOrbis’ data.

During the given week, most traders have held an optimistic attitude as regards the prospects for the HRC market, exerting a positive impact on prices. Demand for HRC from downstream users has improved, also bolstering prices. Meanwhile, following sharp declines in financial markets due to the war in the Middle East, the market witnessed rebounds on March 24, positively affecting the HRC market. Moreover, iron ore prices have moved up, providing support for HRC prices from the cost side. It is thought that HRC prices in the Chinese domestic market may see further rises in the coming week.

As of March 24, HRC futures at Shanghai Futures Exchange are standing at RMB 3,324/mt ($482/mt), increasing by RMB 11/mt ($1.6/mt) or 0.3 percent since March 17, while increasing by 0.21 percent compared to the previous trading day, March 23.

$1 = RMB 6.8943