Ex-China HRC prices from mills mostly stable despite local recovery, traders’ prices vary depending on destination

Although average HRC prices in the Chinese domestic market have indicated certain rises in the past week amid the slight recovery in HRC futures prices, Chinese HRC exporters have been less positive so far, with both big mills and traders keeping their offers for overseas buyers mostly stable, with a slight upward bias seen only in offers from a number of traders in Asia, in Vietnam in particular. At the same time, prices from Chinese traders in the Middle East have on the contrary declined in the new deals signed this week.

Specifically, export offers for boron-added SS400 HRC given by major Chinese mills have settled at $500-520/mt FOB, with a midpoint at $510/mt FOB, the same as last week. “A number of mills are still offering at $530/mt FOB, the same as last week, though, even despite the better mood locally, these offers are still considered to be too high to be acceptable,” a market insider told SteelOrbis. Meanwhile, offers from smaller mills have been heard at $495-510/mt FOB, against $490-510/mt FOB last week.

At the same time, the tradable prices for SS400/Q235 HRC have been estimated at $495-510/mt FOB, up by $5/mt on the lower end of the range week on week. Offers for ex-China Q235 HRC in Vietnam have been voiced at $510-515/mt CFR, against $505/mt CFR last week, with several deals reported to have been signed at $513/mt CFR for December shipment.

Furthermore, offers for ex-China SS400 HRC have been voiced at around $540/mt CFR and slightly above in the Gulf region, mainly the same as last week. However, according to sources, deal prices have declined this week. In particular, after a deal for around 20,000-25,000 mt of ex-China SS400 HRC was signed at $525/mt CFR UAE for late November-early December shipment, another deal has been signed with a UAE-based tube maker at around $530/mt CFR for shipment in December. Offers for ex-China Q195 HRC in Turkey are still estimated at $540-545/mt CFR, though workable prices have been reported $10-20/mt lower, according to sources.

In the meantime, average HRC prices in the Chinese domestic market have moved up as compared to last week, though the uptrend still lacks strength as HRC futures prices have continued to fluctuate. In particular, domestic HRC prices in China are at RMB 3,640-3,700/mt ($511-518/mt) ex-warehouse on October 30, with the average price level RMB 75/mt ($10.5/mt) higher compared to that recorded on October 24, but down by RMB 10/mt ($1.4/mt) from the previous days, according to SteelOrbis’ data.

During the given week, HRC prices in the Chinese domestic market have moved on an overall uptrend amid decreasing inventories. As of October 20, domestic inventories of HRC in 21 major cities in China decreased by 3.3 percent compared to October 10, exerting a positive impact on prices. Meanwhile, the meeting of the Standing Committee of the National People’s Congress in China is approaching, while market players are confident as regards the future prospects for the steel market, bolstering HRC prices. It is thought that HRC prices in the Chinese domestic market will likely edge up in the coming week.

As of October 30, HRC futures at Shanghai Futures Exchange are standing at RMB 3,588/mt ($503/mt), increasing by RMB 112/mt ($16/mt) since October 23, while down 0.06 percent compared to the previous trading day, October 29.

$1 = RMB 7.1283