Ex-China HRC offer prices have edged down following the declines seen in the local spot market and falling futures prices due to the repeated outbreaks of the Covid-19 pandemic and transportation restrictions in the country. At the same time, due to overall negative sentiments in most sales destinations, trading has been weak.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $870-900/mt FOB for June shipment, with a midpoint at $885/mt FOB, with the average price $15/mt lower compared to last week. “The continuous negative impact from the Covid-19 pandemic has exerted a negative impact on the HRC market,” an international trader told SteelOrbis. The low offer prices for ex-China HRC came from Shandong Province-based Chinese steelmakers Rizhao Iron and Steel and Shandong Iron and Steel, which have been heard at 885/mt FOB and $870/mt FOB, respectively, though from Hebei-based Chinese steelmaker Jingye Group offers were at $895-900/mt FOB. However, offers from Anfeng Steel have been voiced at $840/mt FOB, down $20/mt week on week.
The tradable price level for SS400 coils has been heard at $835-890/mt FOB, compared to $860-890/mt FOB last week. In particular, Chinese traders, who offered SS400 HRC at $885-900/mt CFR Vietnam last week, decreased their offers to $865-875/mt CFR this week. Besides, several deals for small tonnages have already been done at $865/mt CFR Vietnam this week. Meanwhile, offers for SAE1006 HRC have dropped by $10/mt week on week to $905-910/mt CFR, while most customers’ bids have decreased to $900/mt CFR Vietnam. Furthermore, a few cargoes for SS400 HRC have been sold by Chinese traders to Pakistan at $890/mt CFR, down by $10/mt over the past week.
However, while Chinese HRC offers have fallen to almost all main destinations, prices for Turkish buyers have remained at around $1,030-1,050/mt CFR, depending on the grades of the materials, the same as last week. “In the past three to four weeks, Turkish buyers have ordered about 500,000 mt of Chinese HRC. We expect further demand will be seen, but maybe not so strong considering the easing of the supply gap caused by the Russia-Ukraine war. However, China remains the most competitive in Turkey, offering at around $80-90/mt lower than Indian suppliers,” an international trader told SteelOrbis.
During the given week, HRC prices in the Chinese domestic market have moved down amid repeated outbreaks of the Covid-19 pandemic and transportation blockages caused by the control measures to prevent the potential spread of the virus, which have exerted a negative impact on demand. In particular, despite Tangshan having lifted its citywide lockdown, which started on March 22, China's financial hub, Shanghai, has remained under lockdown to combat its worst Covid-19 outbreak since the pandemic started in 2020. However, market players expected a better performance in the near future, as they think demand may bottom up when the pandemic is effectively controlled. It is thought that HRC prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.
Domestic HRC prices in China are at RMB 5,220-5,280/mt ($819-828/mt) ex-warehouse on April 12, with the average price level RMB 45/mt ($7/mt) higher as compared to April 6, according to SteelOrbis’ data.
As of April 12, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,180/mt ($814/mt), decreasing by RMB 75/mt ($12/mt) or 1.43 percent since March 29.
$1 = RMB 6.376
