Chinese hot rolled coil (HRC) export offers have decreased sharply following the big declines in the local market after the long holiday. Though demand in the local market is still weak and only small tonnages have been sold at lower prices in the export market, sentiments have improved somewhat today, February 11, as increases have been seen in futures prices and there are hopes for more financial stimuli from the government, which will try to limit the impact of the coronavirus outbreak.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $460-470/mt FOB for late April delivery, down $15/mt compared to last week. Some tonnages were sold to Pakistan at $485-495/mt CFR late last week, which is close to $470/mt FOB on average. Moreover, there have been some negotiations with South Korean customers, with offers heard at $490/mt CFR, but some discounts have been possible. A small tonnage of SAE1006 HRC has been sold to Vietnam at $475/mt CFR (about $460-462/mt FOB). “There are a lot of uncertainties caused by the coronavirus, which has exerted a negative impact on market players’ sentiments as regards the future prospects for the HRC market,” an international trader told SteelOrbis.
The local Chinese HRC market has seen big declines as market players consider that demand for HRC is unlikely to see a significant improvement in the short term due to the coronavirus. Most downstream users have not resumed their production yet, while some warehouses have not been able to receive delivery of goods. Domestic HRC prices in China are at RMB 3,350-3530/mt ($479-505/mt) ex-warehouse on February 11, with the average price level RMB 150/mt ($21.5/mt) lower as compared to February 4, according to SteelOrbis’ data.
As of February 11, HRC futures at the Shanghai Future Exchange have been standing at RMB 3,378/mt ($483.3/mt), increasing by RMB 66/mt ($9.4/mt) or two percent since February 4, reflecting some improvement in sentiments.
$1 = RMB 6.9897
