Ex-China HRC offer prices have edged down slightly in the past week, but have remained high for international buyers. Overall, most Chinese producers have been increasing prices in the local market amid production curbs, and have not been ready to be very flexible in the export segment.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $950-1,010/mt FOB for November shipment, with a midpoint at $980/mt FOB, moving down by $5/mt on average compared to last week. Only the higher end of the range has slipped, which means that some mills are not targeting export sales at all as they are facing lower production, a situation which is expected to continue up to the end of the year. “Some steelmakers have been willing to accept orders from the overseas markets, but they have to cut prices for this,” an international trader told SteelOrbis.
The tradable price level for SS400 coils has been heard at $920-930/mt FOB lately, up from the average of $890-920/mt FOB last week. Traders have not been ready to provide lower prices now due to lower availability and higher local prices.
The workable price level for SAE1006 HRC from Chinese small mills and traders has been reported at $930/mt FOB minimum, with no activity heard.
During the given week, HRC prices in the Chinese domestic market have risen strongly amid the increasing trend in HRC futures prices. Bullish sentiments have prevailed among market players as the demand for HRC is expected to improve during the traditional peak season, while supply has started to slip and will only go down in the September-October period as controls on capacities in the provinces of Hebei and Jiangsu will increase. It is thought that HRC prices in the Chinese domestic market will edge up further in the coming week.
Domestic HRC prices in China are at RMB 5,770-5,830/mt ($894-903/mt) ex-warehouse on September 7, with the average price level RMB 155/mt ($24/mt) higher as compared to August 31, according to SteelOrbis’ data. Compared with the price level on Monday, September 6, average local quotations are RMB 25/mt ($3.9/mt) higher.
As of September 7, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,821/mt ($902/mt), increasing by RMB 257/mt ($39.8/mt) or 4.62 percent since August 31.
$1 = RMB 6.4533
