Ex-China hot rolled coil (HRC) prices have shown initial signs of softening this week following the sharp increases recorded over the past several weeks. Although major Chinese mills have largely attempted to keep their export offers at relatively high and stable levels, some suppliers have eventually reduced their prices slightly, while traders have also started to provide discounts in order to stimulate sales activity. The weaker trend has mainly been linked to declines in HRC futures prices and softer sentiment in the domestic market, combined with persistently slow demand in key export destinations, where buyers have remained cautious and resistant to higher offer levels after the recent price surge.
More specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $520-535/mt FOB, with a midpoint at $527.5/mt FOB, down by $2.5/mt since last week. Besides, offers from smaller private mills have been voiced at around $515-525/mt FOB, down by $3/mt on the lower end of range.
At the same time, offers from Chinese traders have been estimated at $505-515/mt FOB, versus $515-520/mt FOB last week. According to sources, this week, ex-China 2,000 mm Q235 HRC offers in Vietnam have remained extremely rare, with indicative offers with VAT for July shipments voiced at $525/mt CFR, down by $5/mt week on week. Besides, a deal for ex-China Q195 HRC has been reported at $515/mt FOB in Pakistan, according to sources.
Offers for ex-Chinese Q195 HRC through traders to Turkey have been voiced at $555-562/mt CFR, versus $570-572/mt CFR at the beginning of last week and down by $6-7/mt since last Friday, May 15. Furthermore, although most Chinese mills are still not issuing new export offers to Gulf buyers due to freight conditions and insurance coverage for vessels, indicative offers from Chinese traders have estimated in the UAE market at around $580-595/mt CFR, down by $5/mt on the lower end of range week on week, with the freight rate estimated at around $70/mt.
Meanwhile, domestic HRC prices in the Chinese domestic market havemoved down significantly compared to the previous weekamid the decreasing HRC futures prices and the prevailing cautious sentiments among market players. In particular, domestic HRC prices in China have settled at RMB 3,480-3,610/mt ($509-528/mt) ex-warehouse on May 20, with the average price level RMB 47/mt ($6.9/mt) lower compared to that recorded on May 12, according to SteelOrbis’ data.
During the given week, HRC futures prices have moveddown, exerting a negative impact on the prices in spot market. Bearish sentiments prevailed among market players, weakening the support to HRC market. Meanwhile, the large-scale rainy weather negatively affected the demand for HRC, dragging down its prices. Downstream users have been unwilling to conclude purchases for HRC. At the same time, iron ore prices have declined, dampening the support to HRC prices. It is expected that HRC prices in the Chinese domestic market will edge down slightly in thecoming week.
As of May 20, HRC futures at Shanghai Futures Exchange are standing at RMB 3,418/mt ($500/mt), decreasing by RMB 53/mt ($7.7/mt) or 1.5 percent since May 12, while decreasing by 0.03 percent compared to the previous trading day, May 20.
| Product | Spec | Quality | City | Origin | Price（RMB/mt） | W-o-w change |
| HRC |
5.75mm*1500*C |
Q235B/SS400 |
Shanghai | Angang | 3,540 | -70 |
| Tianjin | Baotou Steel | 3,480 | -50 | |||
| Lecong | Liuzhou Steel | 3,610 | -20 | |||
| Avg | 3,543 | -47 | ||||
| HRC |
2.75mm*1250*C |
Q235B |
Shanghai | Angang | 3,650 | -70 |
| Tianjin | Baotou Steel | 3,540 | -50 | |||
| Lecong | Angang | 3,690 | -20 | |||
| Avg | 3,627 | -47 |
$1 = RMB 6.8397
