Trading sources have this week reported subdued activity for China’s hot rolled coil (HRC) exports, with stricter customs scrutiny on cargoes evading value-added tax (VAT) and limited interest from international buyers prompting most participants to remain cautious. Thus, ex-China HRC prices from mills have declined further this week, coupled with the sharp decline in Chinese domestic offers amid decreasing HRC futures prices and market players’ low confidence in demand for September.
Specifically, export offers for boron-added SS400 HRC from large Chinese mills have moved to $470-485/mt FOB, with a midpoint at $477.5/mt FOB, down by $2.5/mt week on week, while offers from smaller mills have been voiced at around $470-480/mt FOB, the same as last week. “Offers from big mills such as Shagang have dropped to $470/mt FOB, while other mills have voiced offers at $475-480/mt FOB, with only a few still offering at $485/mt FOB,” a market insider told SteelOrbis.
Meanwhile, the tradable price for ex-China HRC from traders has settled at $470-475/mt FOB, depending on the destination, compared to $470-480/mt FOB last week. In particular, according to sources, while offers for ex-China Q235 HRC in Vietnam have remained relatively stable at $498/mt CFR, a deal for around 5,000 mt of ex-China Q195 HRC was signed at $490/mt CFR Pakistan last week.
Chinese offers to other destinations like those in the Middle East have declined further by around $10/mt on the lower end of the range over the past week, to $500-515/mt CFR UAE. Besides, according to sources, a deal for ex-China SS400 HRC is reported to have been signed at the end of last week at $513/mt CFR for late October shipment. Furthermore, Chinese Q195 HRC offers to Turkey have settled at $515-517/mt CFR, the same as last week.
“With the impact of output restrictions tied to the military parade fading, Chinese steel prices are now being driven mainly by demand trends rather than by policy factors. However, growing stock levels reflect lacklustre consumption, adding further pressure on steel prices,” a market insider told SteelOrbis.
In the meantime, domestic HRC prices in China have settled at RMB 3,410-3,630/mt ($480-511/mt) ex-warehouse on September 2, with the average price level RMB 77/mt ($10.8/mt) lower compared to that recorded on August 26, according to SteelOrbis’ data.
During the given week, HRC futures prices have seen decreases, exerting a negative impact on market sentiments. Market players are not confident in the recovery of peak-season demand in September as production halts did not have the expected impact.
As of September 2, HRC futures at Shanghai Futures Exchange are standing at RMB 3,298/mt ($464.5/mt), decreasing by RMB 69/mt ($9.7/mt) or 2.05 percent since August 26, while decreasing by 0.36 percent compared to the previous trading day, September 1.
| Product | Spec | Quality | City | Origin | Price（RMB/mt） | W-o-w change |
| HRC | 5.75mm*1500*C | Q235B/SS400 | Shanghai | Angang | 3,630 | -70 |
| Tianjin | Baotou Steel | 3,410 | -80 | |||
| Lecong | Liuzhou Steel | 3,460 | -80 | |||
| Avg | 3,500 | -77 | ||||
| HRC | 2.75mm*1250*C | Q235B | Shanghai | Angang | 3,740 | -70 |
| Tianjin | Baotou Steel | 3,470 | -80 | |||
| Lecong | Angang | 3,540 | -80 | |||
| Avg | 3,583 | -77 |
$1 = RMB 7.1089