Chinese hot rolled coil (HRC) export offers have decreased after the long holiday due to the outbreak of the coronavirus and the declines seen in local HRC prices.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $495/mt FOB for late April delivery, down $15/mt compared to the average prices recorded ahead of the Chinese New Year holiday. However, no deals have been heard yet. “Most players in the Chinese market have not returned to the market as the government has required them to extend the holiday because of the coronavirus. The local HRC market will be negatively affected, while HRC exports may be better than local sales in the longer term,” an international trader has told SteelOrbis. The tradable level for HRC from Chinese traders has dropped to $485-490/mt FOB due to weak sentiment.
The local Chinese HRC market has seen sharp declines as market players are pessimistic as regards the future prospects for the market as transaction activities may be postpone as downstream industries have been required not to resume production given the outbreak of the coronavirus. Domestic HRC prices in China are at RMB 3,580-3,600/mt ($513-516/mt) ex-warehouse on February 4, with the average price level RMB 230/mt ($33/mt) lower as compared to January 21, according to SteelOrbis’ data.
As of February 4, HRC futures prices at the Shanghai Future Exchange are standing at RMB 3,312/mt ($474.5/mt), decreasing by RMB 281/mt ($40.3/mt) or 7.82 percent since January 21.
$1 = RMB 6.98
