After rebounding last week, prices in the local Chinese HRC market declined at the weekend, and, subsequently, some traders have started to offer HRC position cargoes in the export market at much lower prices. Besides, mills were forced to correct their offers downwards due to worse market conditions, coupled with declining iron ore and HRC futures prices.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $660-680/mt FOB for August shipment, with a midpoint at $670/mt FOB, down $20/mt week on week. Meanwhile, smaller mills and traders have dropped their offers to $635-650/mt FOB, down by $10-15/mt week on week. “The Chinese steel market is still under pressure after last week’s rebound and the new drop this week. Worried about the global economic situation and inflation control, Chinese steel prices decreased at the weekend and steel futures prices followed with a three to four percent adjustment in most items,” an international trader told SteelOrbis.
At the same time, the tradable level for SS400 HRC has dropped to $610-660/mt FOB, depending on the destination, compared to $650-680/mt FOB last week. New Chinese offers from traders have decreased to $650-660/mt CFR Vietnam, down by $25-30/mt over the past week, with several contracts having already been heard at $640/mt CFR Vietnam. Besides, according to market insiders, customers’ bids have settled at $635-640/mt CFR. Meanwhile, offers for ex-China SAE1006 HRC have been voiced at $670-680/mt CFR Vietnam, compared to $705-715/mt CFR last week. Furthermore, ex-China SAE1006 HRC offers have been heard in the UAE at $730-750/mt CFR, with a few contracts signed at the abovementioned levels.
During the given week, HRC prices have moved down amid the decreasing trend in HRC futures prices. Though some steelmakers implemented maintenance, the demand from downstream users has remained slack and is unable to support big rises in HRC prices in the spot market.
Domestic HRC prices in China are at RMB 4,200-4,300/mt ($627-642/mt) ex-warehouse on July 5, with the average price level RMB 127/mt ($4/mt) lower as compared to June 28, and slightly up by RMB 35/mt ($5/mt) compared to the previous day, according to SteelOrbis’ data.
As of July 5, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,262/mt ($636/mt), decreasing by RMB 137/mt ($20.5/mt) or 3.1 percent since June 28.
$1 = RMB 6.6986
