Ex-China HRC prices from traders increase after holiday, move from large mills anticipated

Although on Tuesday, October 8, Chinese HRC suppliers have returned from their long holiday, most big Chinese mills have yet not announced new export offers, though those who have returned to the market, mainly small mills and traders, have increased their offers by around $10-15/mt compared to two weeks ago following significant increases in local and futures HRC prices. However, despite the price rise, most buyers have been holding back from new purchases so far, bidding at lower levels instead.

More specifically, while export offers for boron-added SS400 HRC have been not announced by large Chinese mills so far, offers from smaller mills have been voiced at $535-545/mt FOB, up by $10-15/mt over the past two weeks. On September 30, the last offers from big mills were at $530/mt FOB on average.

Meanwhile, offers from Chinese traders have been voiced at $535-550/mt FOB, versus $520-540/mt FOB two weeks ago. The lowest end of the range corresponds to ex-China Q235/SS400 HRC offers to Vietnam at around $550-555/mt CFR, up by $10/mt over the past two weeks.

Furthermore, according to market insiders, offers for ex-China Q195 HRC have increased to $585-590/mt CFR Turkey, up by $10-15/mt over the past two weeks, which corresponds to around $545-550/mt FOB levels. Offers for ex-China SS400 HRC in the UAE have been estimated at $580-600/mt CFR, up by $10-20/mt since late September.

¨The export market has just returned, and some mills have requested $10-15/mt more as a new base, while some others will follow later this week. Leading ASEAN mills, including Formosa Ha Tinh and Hoa Phat in Vietnam, have given a cautious new price, up by $30/mt for December shipment,” a market insider said.

In the meantime, average HRC prices in the Chinese domestic market have indicated significant increases amid increasing HRC futures prices after China issued several stimulus policies to boost economic development. In particular, domestic HRC prices in China have settled at RMB 3,830-3,890/mt ($539-548/mt) ex-warehouse on October 8, with the average price level RMB 607/mt ($85.5/mt) higher compared to that recorded on September 24, according to SteelOrbis’ data.

Jiangsu Province-based Shagang Group announced a rise in its offer prices for Q235 5.5 mm x 1,500 mm HRC by RMB 300/mt ($42/mt) to RMB 3,800/mt ($535/mt) ex-works for October, firmly bolstering market sentiments. At the same time, HRC futures prices have seen big increases, exerting a positive impact on HRC prices in the spot market. Moreover, raw material prices have moved up, also providing solid support for the HRC prices from the cost side. Following long National Day holiday, China issued more stimulus policies, aiming to continue to stimulate economic growth. It is expected that HRC prices in the Chinese domestic market will move up in the coming week.

As of October 8, HRC futures at Shanghai Futures Exchange are standing at RMB 3,601/mt ($468/mt), increasing by RMB 301/mt ($42.4/mt) or 9.1 percent since September 24, while up 1.07 percent compared to the previous trading day, September 30.

$1 = RMB 7.0709