Ex-China HRC offer prices have moved down in the past week following the slight downtrend in the previous week. Nevertheless, they are still too high for the majority of customers and overall trading activity has remained poor. Most mills have concentrated on the local market, where together with output cuts a demand slowdown has appeared.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $940-980/mt FOB for November shipment, with a midpoint at $960/mt FOB, moving down by $20/mt on average compared to last week. “The downtrend in local HRC prices and HRC futures prices has exerted a negative impact on ex-China HRC offer prices,” an international trader told SteelOrbis.
The tradable price level for SS400 coils has been heard at $930/mt FOB lately, versus $920-930/mt FOB last week, but this has mainly been due to the gains seen late last week.
During the given week, HRC prices in the Chinese domestic market have decreased amid declining HRC futures prices and the bearish sentiments among market players due to the impact of typhoon Chanthu as of the weekend. Downstream users have been unwilling to conclude purchases for HRC and so transaction activities have been at low-to-medium levels. The approaching Mid-Autumn Day holiday and the long National Day holiday may exert a negative impact on the demand for HRC. 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 5,760-5,780/mt ($893-896/mt) ex-warehouse on September 14, with the average price level RMB 30/mt ($4.7/mt) lower as compared to September 7, according to SteelOrbis’ data. Compared with the price level on Monday, September 13, average local quotations are RMB 40/mt ($3.9/mt) lower.
As of September 14, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,689/mt ($882/mt), decreasing by RMB 132/mt ($20.5/mt) or 2.3 percent since September 7.
$1 = RMB 6.45
