Ex-China HRC prices relatively stable, some downward bias amid lower bids and fluctuating futures

Although this week most Chinese HRC mills have continued to maintain their offers at unchanged levels, several producers as well as Chinese traders have decided to go a little lower as most customers have kept lowering their bids, coupled with decreases in HRC futures prices which have been affecting the market mood. Thus, most overseas sales are still reported with additional discounts.

Specifically, export offers for boron-added SS400 HRC from large Chinese mills have settled at $485-495/mt FOB, with a midpoint at $490/mt FOB, down by $7.5/mt week on week and down by $5/mt since last Friday. Meanwhile, smaller mills have been offering their coils at $475-485/mt FOB, versus $480-485/mt FOB at the end of last week.

The tradable levels for ex-China SS400/Q235 HRC have been estimated at $475-480/mt FOB, down by $5/mt over the past week. Offers for ex-China Q235 HRC in Vietnam have been estimated at around $490/mt CFR, while welcome bids have been reported at $486-487/mt CFR, according to sources. Meanwhile offers for ex-China Q195 HRC have been voiced at $485/mt CFR.

In the meantime, according to sources, Turkey’s interest in Chinese HRC has revived as buyers achieved reasonable prices, with a few deals for around 100,000 mt in total reported to have been done at $478-480/mt FOB or $515-520/mt CFR at the end of last week. However, offers for ex-China Q195 HRC in Turkey and the Middle East have been reported at $490/mt FOB, though most bids have been voiced at $480/mt FOB and slightly below.

Meanwhile, average HRC prices in the Chinese domestic market have moved down amid decreasing HRC futures prices. Specifically, domestic HRC prices in China are at RMB 3,590-3,620/mt ($499-503.5/mt) ex-warehouse on December 17, with the average price level RMB 63/mt ($8.8/mt) lower compared to that recorded on December 10, according to SteelOrbis’ data.

During the given week, HRC prices in the Chinese domestic market have decreased amid declining HRC futures prices. The production of HRC has seen slight rises, while apparent consumption has declined slightly, exerting a negative impact on prices. In late December, some HRC producers will implement maintenance works, which will ease the gap between supply and demand in the market. It is expected that HRC prices in the Chinese domestic market will fluctuate within a limited range in the coming week.

As of December 17, HRC futures at Shanghai Futures Exchange are standing at RMB 3,493/mt ($486/mt), decreasing by RMB 56/mt ($7.8/mt) since December 10, while up 0.2 percent compared to the previous trading day, December 16.

$1 = RMB 7.1891