Ex-China HRC prices rise ahead of holiday despite turbulence domestically

As it is getting closer to the Chinese New Year holiday (January 21-27), more and more downstream users and traders in China have been leaving the market for the holiday. At the same time, although futures prices have dropped this week, the ex-China HRC market mood has kept improving amid the stronger Chinese currency and the strongly optimistic outlook for the post-holiday period.  

Most Chinese HRC suppliers have refrained from new export offers and several producers who remained in the market have decided to go higher, announcing their export offers for boron-added SS400 HRC at $640-650/mt FOB, with a midpoint at $645/mt FOB, moving up by $20/mt compared to January 10, and up by $17.5/mt since Friday, January 13. Besides, some producers like Shagang Steel have increased their offers to as high as $655/mt FOB. “HRC futures have moved down at the beginning of this week, though it has not exerted a negative impact on ex-China HRC offer prices as the yuan has been strengthening and the post-holiday outlook is positive, though transaction activities have been quiet,” an international trader told SteelOrbis.

Meanwhile, the tradable price level for SS400 HRC has been heard at $620-635/mt FOB, up by $20-25/mt week on week. More specifically, offers for ex-China SS400 HRC to Vietnam have been heard at a minimum of $630/mt CFR, up by $10/mt over the past week, while offers to Pakistan have increased by $20/mt to $650/mt CFR and above. Furthermore, offers to the Middles East have been voiced at around $680-690/mt CFR, versus $650-660/mt CFR last week. Ex-China offers for Q125 HRC in Turkey have settled at a minimum of $675/mt CFR, up by $25/mt week on week, but according to sources, “the price idea of Chinese suppliers is at $690/mt CFR and higher for both Middle East and Turkey.”

In the SAE1006 HRC segment, trade activity has been slow, with most offers for Vietnam heard at $650-660/mt CFR, the same as last week. Offers for ex-China SAE1006 HRC to Pakistan have been reported at around $670-675/mt CFR, compared to $650/mt CFR last week.

During the given week, although local HRC prices have increased by average RMB 13/mt ($1.9/mt) compared to January 10 to RMB 4,110-4,200/mt ($611-625/mt) ex-warehouse on January 17, while the price level has decreased by RMB 20/mt ($3/mt) since Friday, January 13 given the drop in futures prices. 

As of January 17, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,148/mt ($617/mt), decreasing by RMB 18/mt ($2.7/mt) or 0.4 percent since January 10.

$1 = RMB 6.7222