Despite a slight recovery in domestic and futures HRC prices, Chinese HRC exporters have continued to lower their prices this week due to the ongoing resistance of most foreign customers affected by weaker demand. Thus, although ex-China HRC offers have remained the most competitive among all main foreign exporters in almost all major destinations, most buyers are yet to resume imports, expecting prices to fall further.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $770-800/mt FOB for June shipment, with a midpoint at $785/mt FOB, with the average price $15/mt lower compared to last week, though offer prices of $730-740/mt FOB have been heard from smaller mills and traders.
At the same time, the tradable level for ex-China SS400 HRC has been heard at $730-760/mt FOB, down by $20/mt on the higher end of the range week on week. In particular, this week ex-China SS400 HRC offers to Vietnam have settled at $755-760/mt CFR, compared to $755-770/mt CFR last week. Meanwhile, ex-China SS400 HRC offers to Pakistan have been heard at $790-800/mt CFR, the same as last week.
Meanwhile, demand in the higher-priced destinations has continued to slow down. Chinese SAE1006 HRC suppliers have decreased their offers to Vietnamese customers by $10-20/mt to $780-800/mt CFR week on week. Besides, ex-China SAE1006 HRC has also been offered in the Middle East at around $850/mt CFR, down by $30/mt CFR over the past week. Furthermore, the latest offers to South America have been voiced at $900/mt CFR Pacific coast, down by $50/mt week on week. Meanwhile, European buyers reported that Chinese HRC prices are too high considering the AD duty at 20 percent on average.
During the given week, HRC prices in the Chinese domestic market have edged up slightly as downstream users replenished stocks following previous price declines. Meanwhile, raw material prices bolstered HRC prices to some extent. Market players expect that Covid-19 restrictions may ease in eastern China in the near future, which may exert a positive impact on the HRC market.
Domestic HRC prices in China are at RMB 4,840-4,930/mt ($712-725/mt) ex-warehouse on May 17, with the average price level RMB 34/mt ($5/mt) higher as compared to May 10, according to SteelOrbis’ data.
As of May 17, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,770/mt ($701.5/mt), rising by RMB 72/mt ($10.6/mt) or 1.5 percent since May 10.
$1 = RMB 6.7854
