Ex-China HRC offer prices have moved down further in the past week following the slight decreases seen in the previous week, amid the sharp declines in HRC futures prices and the declining trend in the local spot market in China, while demand from overseas buyers has remained extremely low.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $920-940/mt FOB for August shipment, with a midpoint at $930/mt FOB, moving down by $20/mt on average compared to June 15. “The sharply decreasing trend in HRC futures prices since June 21 has exerted a negative impact on ex-China HRC offer prices, while the effect of production restrictions has not been obvious, and the uncertainty regarding the export tax policy has negatively affected the export market,” an international trader told SteelOrbis.
At the same time, the tradable price level for SS400 coils from China, based on traders’ position offers and negotiable prices, has decreased to $880-895/mt FOB lately, down by $10/mt from last week.
Demand for re-rolling grade HRC from China has also been very poor. The workable price level for SAE1006 HRC from Chinese traders has been reported at $900/mt FOB on average, versus $900-920/mt FOB early last week. No new deals have been reported as Vietnamese buyers have been focusing on local purchases.
During the given week, domestic HRC prices in China have indicated big drops amid the sharp declines in HRC futures prices. Bearish sentiments have prevailed among market players, weakening the support for HRC prices. Demand has been slack and will continue to affect the HRC market in the traditional summer offseason.
Domestic HRC prices in China are at RMB 5,230-5,320/mt ($861-869/mt) ex-warehouse on June 22, with the average price level RMB 260/mt ($40.2/mt) lower as compared to June 15, according to SteelOrbis’ data. Compared with the price level on Monday, June 21, average local quotations are RMB 145/mt ($22.4/mt) lower.
As of June 22, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,153/mt ($794.5/mt), decreasing by RMB 283/mt ($43.6/mt) or 5.2 percent since June 15.
$1 = RMB 6.4613
