Ex-China HRC offer prices have moved sideways and most sellers have been watching the situation in the local market, where prices increased significantly on Friday, the first day after the holiday, though they started to go down today, October 12. Negative sentiments have emerged in the market due to the possible easing of production curbs, which will push up HRC supply.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $940-960/mt FOB for November shipment, with a midpoint at $950/mt FOB, moving sideways on average compared to last week. “Export offer prices have been very stable, while rare transaction activities have been heard,” an international trader told SteelOrbis.
The tradable price level for SS400 coils has been heard at $920/mt FOB lately or slightly above, but this level was out of any range of interest in Southeast Asia. The workable price level for SAE1006 HRC from Chinese small mills and traders has been reported at $925-930/mt FOB.
After the holiday, China’s domestic HRC prices have indicated big rises due to the increase in demand and the resumption of production by re-rollers. HRC futures prices at the Shanghai Futures Exchange (SHFE) increased first, while indicating a big decline of 3.52 percent on October 12, which may exert a negative impact on HRC prices in the near future. The change in sentiments to bearish has followed the expectations of HRC supply improvement. Premier Li Keqiang said that the government will raise the energy supply capacity and a "one-size-fits-all" program for lowering production of energy-intensive enterprises, including steel mills, will have to be stopped now.
Domestic HRC prices in China are at RMB 5,810-5,910/mt ($901-917/mt) ex-warehouse on October 12, with the average price level RMB 125/mt ($19.4/mt) higher as compared to September 28, according to SteelOrbis’ data. Compared with the price level on Monday, October 11, average local quotations are RMB 15/mt ($2.3/mt) lower.
As of October 12, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,624/mt ($872/mt), decreasing by RMB 47/mt ($7.3/mt) or 0.83 percent since September 28, while the drop was as much as RMB 211/mt ($33/mt) compared to the level settled on the previous trading day.
$1 = RMB 6.4447
