Ex-China HRC prices relatively stable, but some downward bias amid futures price decline

This week, most Chinese HRC mills have continued to maintain their offers at unchanged levels, though several producers as well as Chinese traders have decided to go a bit lower as decreases in futures prices for HRC have been affecting the market mood. At the same time, most overseas sales are still reported with additional discounts.

Specifically, export offers for boron-added SS400 HRC from large Chinese mills have settled at $490-500/mt FOB, with a midpoint at $495/mt FOB, down by $2.5/mt week on week for end of December - January shipment. Meanwhile, offers from smaller mills have been voiced at $475-485/mt FOB, against $480-485/mt FOB last week.

The tradable levels for ex-China SS400/Q235 HRC have been estimated at $475-485/mt FOB, down by $5/mt over the past week. Offers for ex-China Q235 HRC in Vietnam have been estimated at $497-500/mt CFR, down by $3-5/mt week on week, with most bids reported at $490-495/mt CFR levels, though, according to sources, last week a number of deals for ex-China coils were signed at $485-490/mt CFR. Besides, offers for ex-China Q235 HRC tı Pakistan have been voiced at $508-510/mt CFR, while offers for Q195 HRC have been heard at $503-505/mt CFR, down by $7/mt over the past week.

At the same time, most offers for ex-China SS400 HRC in the Middle East have been maintained at $520-525/mt CFR UAE, the same as deal prices last week. Besides, offers for ex-China Q195 HRC to Turkey have been heard at $520/mt CFR and slightly lower. Furthermore, Chinese HRC offers in Egypt have been estimated at $525/mt CFR, against $540/mt CFR reported a few weeks ago. However, according to sources, no one is buying as ex-China prices are almost at the same levels as local prices in Egypt after adding the five percent duty, and also the long lead time is a huge concern for Egyptian customers.

Meanwhile, domestic HRC prices in China have settled at RMB 3,570-3,600/mt ($496.5-501/mt) ex-warehouse on November 26, with the average price level RMB 17/mt ($2.4/mt) higher compared to November 19, but down by RMB 5/mt ($0.7/mt) from the previous day, according to SteelOrbis’ data.

On November 20 this year, domestic inventory of HRC in 21 major cities in China decreased by 6.6 percent compared to November 10, signalling that demand from downstream users has been quite good. HRC producers have been willing to raise their prices. As the end of 2024 is approaching, there are plenty of local government bonds due to be sent to local governments, which will exert a positive impact on the demand for HRC from downstream users and will likely provide support for prices. However, the cold weather may weaken market sentiments in the near future.

As of November 26, HRC futures at Shanghai Futures Exchange are standing at RMB 3,471/mt ($483/mt), decreasing by RMB 24/mt ($3.3/mt) since November 19, while down 0.12 percent compared to the previous trading day, November 25. 

$1 = RMB 7.191