As anticipated, Chinese mills have returned from the Chinese New Year holiday with higher offers for HRC. Market players believe that this move is more like a test for the market considering the recovery in futures prices and the bullish mood in the global market.
On the first working day after the Chinese New Year Holiday, only a few Chinese mills announced their new offers for boron-added SS400 HRC at $800-810/mt, up by $20/mt over the past two weeks. Meanwhile, on Tuesday, February 8, more mills announced their new offers at higher levels. Thus, export offers for SS400 HRC given by major Chinese mills have reached $810-830/mt FOB for March shipment, with a midpoint at $820/mt FOB, moving up by $35/mt compared to January 25, and indicate continuous rises over the past two trading days. Besides, market insiders believe that Chinese suppliers will be able to achieve further price rises given that competitors like those from India are more aggressive. “Following the long holiday, traders and steelmakers have been seeking to raise export offer prices for HRC, while transaction activities have not followed up yet as market participants need time to observe the market,” an international trader told SteelOrbis.
The tradable price level for SS400 coils has been heard at $800-810/mt FOB lately. Vietnamese customers have reported new offers coming from China at around $840/mt CFR, up $35-50/mt over the past two weeks. “We heard one rumor about a deal signed at $820/mt CFR yesterday, but even if it’s true, today there are no offers at this level,” a market source told SteelOrbis. In addition, offers for ex-China SS400 HRC to South Korea have been reported at $835-865/mt CFR.
The workable price level for SAE1006 HRC from Chinese suppliers has been reported around $820-840/mt FOB. Ex-China offers for SAE1006 HRC were heard in Vietnam at $850-860/mt CFR, while in Pakistan they were at $870-880/mt CFR. In the meantime, several offers for Chinese coils have also been heard in Turkey at $895-915/mt CFR, up by $35/mt over the past two weeks.
During the past week, HRC prices in the Chinese domestic market have indicated big rises amid the increasing trend of HRC futures prices. Following the long Chinese New Year holiday, demand for HRC has not been released fully yet, but is likely to improve further in the coming period. It is thought that HRC prices in the Chinese domestic market will likely move up in the coming week.
Domestic HRC prices in China are at RMB 4,970-5,100/mt ($781-802/mt) ex-warehouse on February 8, with the average price level RMB 160/mt ($25.2/mt) higher as compared to January 25, according to SteelOrbis’ data.
As of February 8, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,061/mt ($796/mt), rising by RMB 217/mt ($34.1/mt) or 4.5 percent since January 25.
$1 = RMB 6.3569