Ex-China HRC prices firm up slightly, but trade remains weak across key markets

Ex-China hot rolled coil (HRC) export prices have shown a mixed but generally stable-to-firmer trend over the past week, with slight increases observed in offers from major mills and traders, while demand conditions and regional factors have continued to create divergence across key markets. Limited availability in certain destinations, cautious buyer sentiment and ongoing logistical uncertainties particularly for shipments to the Gulf have constrained trading activity, even as mills attempt to push prices higher in line with raw material cost movements.

More specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $500-520/mt FOB, with a midpoint at $510/mt FOB, up by $2.5/mt week on week. Besides, offers from smaller private mills have been voiced at around $490-495/mt FOB, versus $490/mt FOB last week.

Meanwhile, offers from Chinese traders have been estimated at $490-500/mt FOB, up by $5/mt week on 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 June-July shipments voiced at $520-525/mt CFR, up by $5-10/mt week on week, while indicative offers for SAE1006 HRC have been voiced at $615/mt CFR Vietnam.

However, offers for ex-China Q195 and Q235 HRC in Pakistan have been voiced at $510-515/mt CFR and $515/mt CFR, respectively, down by $5/mt week on week, as most customers have been pushing for discounts.

Offers for ex-Chinese Q195 HRC through traders to Turkey have been voiced at $550/mt CFR, mainly the same as last week, though workable prices have still been estimated at around $535-540/mt CFR, according to sources.

In the meantime, most Chinese mills are still not issuing new export offers to Gulf buyers as freight conditions and insurance coverage for vessels transiting the Strait of Hormuz remain unclear. The indicative offers for ex-China 1.2 mm HRC in Saudi Arabia have been voiced at $610-615/mt CFR, the same as last week.

“The export market remains largely stable, with most base prices unchanged, although some mills have tried to implement a slight increase. Raw material prices are moving broadly in line with finished steel, though port prices have remained unchanged due to restocking activity ahead of the May holiday. Following last week’s price increases, the market is now under some pressure, but overall fundamentals remain stable during the spring season,” a market insider told SteelOrbis.

Meanwhile, average HRC prices in the Chinese domestic market have continued to move on an upward trend compared to the previous week amid rising HRC futures prices. In particular, domestic HRC prices in China have settled at RMB 3,400-3,550/mt ($496-517.5/mt) ex-warehouse on April 28, with the average price level RMB 17/mt ($1.5/mt) higher compared to that recorded on April 21, according to SteelOrbis’ data.

Downstream users have built up stocks of HRC ahead of the Labor Day holiday (May 1-5), bolstering prices firmly. HRC futures prices have indicated an uptrend compared to the previous week, exerting a positive impact on prices in the spot market. In the given week, Beijing-based Chinese steelmaker Beijing Shougang decided to raise its local base prices by RMB 100/mt ($14.6/mt) for hot rolled coil (HRC) for delivery in May, positively affecting market sentiments. However, pre-holiday inventory restocking is drawing to a close, which may limit the upward momentum of HRC prices.

As of April 28, HRC futures at Shanghai Futures Exchange are standing at RMB 3,378/mt ($491/mt), increasing by RMB 12/mt ($1.7/mt) or 0.36 percent since April 21, but decreasing by 0.82 percent compared to the previous trading day, April 27.

$1 = RMB 6.8589