After prices in the local Chinese HRC market dropped significantly last week, this week has started to bring some positive sentiments to the Chinese HRC market on the back of the rebound in futures prices on Monday, but in general local HRC prices have been fluctuating in a small range. Accordingly, ex-China HRC export prices have moved mainly sideways as sellers are watching further developments locally. At the same time, market participants expect that Chinese mills will likely be interested in further increasing HRC exports in the short run, despite some expectations for a rebound in the local market.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $815-830/mt FOB for April shipment, with a midpoint at $822.5/mt FOB, remaining stable compared to February 15. In the meantime, several small mills are still offering at $805-810/mt FOB. “There is no clear trend now in the Chinese export market. Most mills offer at $820-830/mt, but some mills have increased their offers by $10/mt week on week to $830/mt FOB, while another large producer dropped its price by $10/mt to $840/mt FOB,” a market insider told SteelOrbis.
At the same time, the tradable level for SS400 has been heard at $790-795/mt FOB, with the lower end of range increasing from $785/mt FOB last week. In particular, new position offers from traders for mainly April shipment SS400 HRC have been reported in Vietnam at $820-825/mt CFR, up by $5/mt over the past week. “Futures increased, so it is expected that traders may withdraw their low-priced offers, but some customers in Vietnam are still voicing their bids at $815-820/mt CFR,” a Vietnam-based trader told SteelOrbis. This week, Pakistani pipe makers have reported new Chinese SS400 HRC offers at $845/mt CFR, up by $5/mt compared to the levels in latest deals signed last week. Besides, market insiders are discussing a deal for ex-China HRC signed at $880-890/mt CFR Turkey. However, this was not confirmed by the time of publication.
Ex-China SAE1006 HRC prices in Vietnam have remained mainly unchanged compared to last week, standing at a still competitive level - $855-860/mt CFR, which translates to $825-830/mt FOB. However, according to market sources, buyers in Vietnam are focused on domestic HRC purchases and are less interested in imports.
Domestic prices in China started to decline last week, but this week has started with some positive sentiments and HRC prices in the Chinese domestic market have indicated slight rises, though on Tuesday ferrous metal futures prices have declined again. Meanwhile, the demand for HRC has not improved to the level that market players had been expecting.
Domestic HRC prices in China are at RMB 4,910-4,940/mt ($776-780/mt) ex-warehouse on February 22, with the average price level standing at RMB 4,925/mt ($778/mt) ex-warehouse, the same as on February 15, but by RMB 30/mt ($5/mt) lower than yesterday, according to SteelOrbis’ data.
“Wide-ranging cold weather has hit China again, exerting a negative impact on the HRC market, while the worsening Covid-19 pandemic in some regions of China, including Jiangsu Province, has also negatively affected the release of demand, though market participants still look forward to a better performance in the near future as March and April are regarded as a traditional peak season for the steel industry,” an international trader told SteelOrbis.
As of February 22, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,850/mt ($765/mt), rising by RMB 7/mt ($1.1/mt) or 0.14 percent since February 15.
$1 = RMB 6.3335
