Ex-China HRC prices from mills stable despite worse mood locally and in futures market, tradable prices fall

This week, most big Chinese mills have rolled over their export prices, while in the local HRC market in China HRC prices have seen decreases compared to the previous week amid declining HRC futures prices. Meanwhile, traders have been more active, though with lower offers, as sentiments have worsened among market players this week. As a result, the tradable level has decreased by around $8.5/mt as compared to traders´ offers last week.

At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $470-485/mt FOB for mainly April shipment, the same as last week. According to sources, many Chinese producers are still refraining from giving offers due to worsening sentiments in the market amid the recent declines in HRC futures prices, which have affected price ideas from overseas customers.

In the meantime, this week signs of falling prices have emerged in the market as Chinese traders have started to cut their offers given the sharp falls in futures prices. Thus, the tradable level for ex-China SS400/Q235 HRC has settled at $455-460/mt FOB, against $462-470/mt FOB at the beginning of last week. At the same time, according to a market insider, even lower prices have started to appear in the market at $445-450/mt FOB levels.

Offers for ex-China Q235, 2,000 mm HRC in Vietnam have been estimated at around $470-473/mt CFR, down by $4-5/mt week on week, with a few bookings reported at $470/mt CFR for April shipment, down by $5/mt week on week.

Meanwhile, Chinese SS400 HRC offers from traders in the UAE have been voiced at $490-500/mt CFR, down by $5/mt on the lower end of the range over the past week, with several deals for around 10,000-13,000 mt in total reported to have been done $490-495/mt CFR through traders this week.

Furthermore, offers for ex-China Q195 HRC in Turkey have been voiced at $490-500/mt CFR from traders, against $495-505/mt CFR last week.

“According to a draft released by the National Development and Reform Commission on March 5 during the National People's Congress, China will continue restricting crude steel production while encouraging industry consolidation alongside capacity reductions. However, the draft does not specify targets for production or capacity cuts. While reducing steel capacity is necessary, the process is expected to be gradual, and it remains uncertain how China will achieve this without impacting economic growth,” a market insider told SteelOrbis.

In the meantime, average HRC prices in the Chinese domestic market have moved down compared to the previous week amid decreasing HRC futures prices. In particular, domestic HRC prices in China have settled at RMB 3,420-3,480/mt ($477-485/mt) ex-warehouse on March 11, with the average price level RMB 37/mt ($5.2/mt) lower compared to that recorded on March 4, according to SteelOrbis’ data.

During the given week, HRC prices in the Chinese domestic market have moved down amid the slow recovery on the demand side. Downstream users concluded purchases to meet their needs, exerting a negative impact on HRC prices. Following the Two Sessions, limited stimulus policies were issued by the government, less than market players had expected, resulting in a strong wait-and-see stance as regards to the future prospects for the HRC market.

As of March 11, HRC futures at Shanghai Futures Exchange are standing at RMB 3,347/mt ($467/mt), decreasing by RMB 51/mt ($7.1/mt) or 0.65 percent since March 4, while down 0.42 percent compared to the previous trading day, March 10.

$1 = RMB 7.1741