Ex-China HRC prices continue to rise, but remain most competitive globally

Following numerous deals signed by Chinese HRC suppliers at high levels last week, Chinese HRC exporters have continued to push up their prices this week. This growth is supported by the increasing trend in local and futures HRC prices in China and by significant global demand growth caused by the disappearance of Ukrainian and Russian HRC from the spot markets. At the same time, despite the price increase, ex-China HRC is still the most competitive among all foreign suppliers.

At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $880-900/mt FOB for May shipment, with a midpoint at $890/mt FOB, moving up by $55/mt compared to March 1. “Rises in raw material prices have bolstered HRC offer prices, while the increasing HRC futures prices have also exerted a positive impact on prices. Besides, apart from traditional buyers from Asia, buyers from Turkey, the Middle East and Africa are also looking to purchase Chinese coils,” an international trader told SteelOrbis.

At the same time, the tradable level for SS400 has been heard at around $865-880/mt FOB, moving up by $65/mt week on week, while the workable price level for SAE1006 HRC from Chinese mills and traders has been reported at $900-930/mt FOB, up $50/mt week on week. In particular, after signing numerous deals for around 200,000 mt in total of SAE1006 HRC with Vietnamese buyers for at 870-900/mt CFR last week, this week ex-China SAE1006 HRC suppliers have increased their offers to $930-950/mt CFR, though, buyers’ bids have been heard at $910/mt CFR.  

Meanwhile, Pakistani SAE1006 HRC buyers have reported about new ex-China offers at $960-970/mt CFR, up by $50-60/mt from the latest deal level signed last week. Furthermore, Chinese HRC exporters managed to sign numerous deals (around 200,000 mt in total) with Turkish buyers at $940-960/mt CFR in the beginning of last week, and then at $990-1,000/mt CFR by the end of last week.

During the given week, HRC prices in the Chinese domestic market have indicated an overall rising trend amid the increases in raw material prices. Meanwhile, coking coal and coke futures prices have moved up sharply, pushing up raw material prices. At the same time, demand for HRC has improved, bolstering market players’ sentiments. It is thought that HRC prices in the Chinese domestic market will likely edge up in the coming week.

Domestic HRC prices in China are at RMB 5,200-5,340/mt ($823-845/mt) ex-warehouse on March 8, with the average price level RMB 226/mt ($36/mt) higher as compared to March 1, according to SteelOrbis’ data.

As of March 8, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,220/mt ($826/mt), rising by RMB 141/mt ($22.3/mt) or 2.8 percent since March 1.

$1 = RMB 6.3185