Ex-China HRC offer prices have moved up significantly again over the past week amid increasing HRC futures prices and iron ore prices in China. Even though on December 14 iron ore prices indicated big declines and over the past few days local HRC prices in China have been showing some weakness, limited availability and persistent demand together with the still positive outlook for the near future have pushed up ex-China HRC offer prices.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $645-675/mt FOB for February shipment, moving up by $37.5/mt on average compared to December 8 and up by $25/mt compared to December 14. Reference deal prices of ex-China SS400 HRC have been reported at $635-645/mt FOB, according to sources, reflecting the recent highest bids and the lowest possible offers from traders. On Monday, December 14, the offered level for this grade to Pakistan was reported at $660/mt CFR or $645/mt FOB, but many suppliers have already withdrawn offers for the moment, preparing for at least a $30/mt increase in new offers.
The tradable price level for ex-China SS400 HRC in the export market has increased by $15-20/mt on average from $620-625/mt FOB on Friday, December 11.
Ex-China SAE1006 HRC has been traded at $665/mt CFR to Vietnam lately and the latest workable price level is assessed at $655-665/mt CFR, while the previous bookings were at $645-650/mt CFR last week from China to Vietnam. “Increasing iron ore prices and upward HRC futures prices bolstered market players’ sentiments in China's export market,” an international trader told SteelOrbis.
Other suppliers in the region have also continued to increase prices rapidly, adding to the situation. For instance, ex-Taiwan SAE 1006 HRC, used by re-rollers, has been sold at $745/mt CFR Malaysia. There have been no offers from India or Russia at below $700/mt CFR in Southeast Asia.
During the given week, HRC prices in the Chinese domestic market have moved up sharply amid increasing HRC futures prices, surging iron ore prices and steelmakers’ rising ex-works prices. Following the big price rises, downstream users have been reluctant to conclude purchases for HRC, only buying small amounts as needed. At the same time, inventory of HRC has been relatively low. Early this week, prices in the local market have posted some small declines and trading has improved a bit.
Domestic HRC prices in China are at RMB 4,390-4,540/mt ($671-694/mt) ex-warehouse on December 15, with the average price level RMB 100/mt ($15.3/mt) higher as compared to December 8, according to SteelOrbis’ data. Compared with the price level on Friday, December 11, local quotations have lost RMB 55/mt ($8.4/mt).
As of December 15, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,374/mt ($668.5/mt), increasing by RMB 61/mt ($9.3/mt) or 1.41 percent since December 8.
$1 = RMB 6.5434
