Ex-China HRC prices mainly stable despite local and futures price rises, amid slow demand

Chinese HRC suppliers have kept their export offers mainly stable this week, with only some slight downward corrections by a number of traders who have been trying to attract buyers. At the same time, average HRC prices in the Chinese domestic market have moved on an uptrend amid the release of demand from downstream users. 

At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $555-565/mt FOB for mainly September shipment, the same as last week, while offers from several big mills have still been heard at $570-575/mt FOB, but are considered as “too high to be accepted by any buyer”. “Offers from Shagang have been heard at $555/mt FOB, from Rizhao at $560/mt FOB, while Benxi is offering at $575/mt FOB. But offers from smaller mills have been reported by several customers globally at around $540/mt FOB,” a market insider told SteelOrbis. 

At the same time, the tradable level for ex-China SS400 HRC has been estimated at $535-545/mt FOB for August shipment, down by $5/mt week on week, with the lower end of the range corresponding to ex-China offers in Vietnam. In particular, following several deals for around 10,000 mt of ex-China SS400 signed at $540/mt CFR, new offers have been reported at $545-550/mt CFR, while bids have been voiced at $540-542/mt CFR levels. “Traders are ready to provide discounts as demand is very slow globally,” a Chinese trader said. Meanwhile, prices for ex-China SAE1006 HRC have been coming from China mills at $590/mt CFR Vietnam and above this week. However, the tradable level has been estimated by most Vietnamese buyers at $575/mt CFR, the same as last week, amid lower position offers from traders and smaller mills.  According to sources, several big deals were signed with Vietnamese buyers at around $568-570/mt CFR for 70,000 mt of ex-China SAE1006 HRC last week, but this information has not been confirmed by the time of publication. Besides, another rumour has been heard in the market about a deal for ex-China SAE1006 signed at $545/mt FOB or around $555/mt CFR in Vietnam last week. 

Furthermore, offers for ex-China SS400 and Q195 HRC in Pakistan have been heard at $560/mt CFR, versus $565-570/mt CFR two weeks ago, with no deals reported so far though. Besides, ex-China SS400 and Q195 HRC have been offered in the Middle East at around $600-610/mt CFR. However, according to sources, a deal for around 10,000 mt of ex-China material was signed through a trader at around $580-585/mt CFR UAE last week. Meanwhile, offers for ex-China materials have been heard at stable levels of $590-600/mt CFR. 

In the meantime, during the given week, demand for HRC in the Chinese domestic market has been released, providing some support for prices. At the same time, HRC futures prices have moved up, exerting a positive impact on prices in the spot market. Sentiments among market players have improved to a certain degree, resulting in the better performance of the HRC market. However, the widespread hot weather conditions will negatively affect demand from downstream users. 

Domestic HRC prices in China are at RMB 3,890-4,030/mt ($540-560/mt) ex-warehouse on July 4, with the average price level RMB 77/mt ($10.7/mt) higher compared to that recorded on June 27, according to SteelOrbis’ data. 

As of July 4, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,866/mt ($537/mt), increasing by RMB 31/mt since June 27. 

$1 = RMB 7.2046