Ex-China HRC prices rise amid better sentiments, but buyers push for discounts

Ex-China hot rolled coil (HRC) export prices have moved up further over the past week, supported by firmer raw material costs and a gradual increase in offers from major mills. However, overall trading activity has remained uneven, with deals limited by cautious buyer sentiment and shifting demand across key destinations, while geopolitical uncertainties and freight-related challenges continue to reshape traditional trade flows.

More specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $500-515/mt FOB, with a midpoint at $507.5/mt FOB, up by $10/mt week on week. Besides, offers from smaller private mills have been voiced at around $490/mt FOB and above, up by at least $8/mt over the past week. 

Meanwhile, offers from Chinese traders have been estimated at $485-495/mt FOB, versus $483-495/mt FOB last week. According to sources, a deal for around 3,000-5,000 mt of ex-China Q235 HRC is reported to have been done in North Africa at $487/mt FOB at the end of last week. Meanwhile, this week, ex-China 2,000 mm Q235 HRC offers in Vietnam have remained extremely rare, with indicative offers with VAT for June-July shipments voiced at $515/mt CFR, up by $5/mt week on week.

Besides, sources report increased negotiations with Pakistan and Bangladesh, as traditional markets in the Middle East and Vietnam have become largely closed or more difficult for Chinese suppliers to access. Offers for ex-China Q195 and Q235 HRC in Pakistan have been voiced at $515/mt CFR and $520/mt CFR, respectively, up by $5-10/mt week on week. 

Offers for ex-Chinese Q195 HRC through traders to Turkey have been voiced at $542-550/mt CFR, while offers from first-tier mills have been estimated at $557-558/mt CFR. However, according to sources, a deal for around 50,000 mt of ex-China HRC is reported to have been signed through a trader at around $535-537/mt CFR Turkey, which translates to around $485-487/mt FOB. According to a number of sources, despite the upward bias in ex-China offers from mills this week, Turkish customers’ bids for ex-China Q135 have been voiced at $530-535/mt CFR. 

In the meantime, most Chinese mills are still not issuing new export offers to Gulf buyers as freight conditions and insurance coverage for vessels transiting the Strait of Hormuz remain unclear. The indicative offers for ex-China coils in the UAE have been reported at above $550/mt CFR, while offers in Saudi Arabia for 1.2 mm HRC have been voiced at $610-615/mt CFR, the same as last week.

“Local market levels are performing better, with most items trending RMB 10-15/mt higher for large volumes. Export trade activity remains stable, with leading mills increasing base prices slightly . Meanwhile, raw material costs continue to firm up, particularly on the coke side, where strong demand has supported a second to third round of price increases, now accepted by mills. Overall, the market outlook for late April appears healthy, with increasingly positive signals,” a Chinese market insider told SteelOrbis.

In the meantime, average HRC prices in the Chinese domestic market have moved on an uptrend compared to the previous week amid increasing HRC futures prices. In particular, domestic HRC prices in China are at RMB 3,390-3,520/mt ($494-513/mt) ex-warehouse on April 21, with the average price level RMB 73/mt ($1.5/mt) higher compared to that recorded on April 14, according to SteelOrbis’ data.

During the given week, HRC futures prices have moved up, positively affecting market sentiments. Prices of raw materials, including iron ore, coke and coking coal have risen, also bolstering HRC prices from the cost side. Since the Labor Day holiday (May 1-5) is approaching, there may be restocking activities in the near future, which will exert a positive impact on HRC prices. However, transaction activities have been at lower-end prices, while transaction volumes have not seen any significant improvement, which may limit the rising trend of HRC prices. It is thought that HRC prices in the Chinese domestic market will likely fluctuate within a limited range with a bullish bias in the coming week.

As of April 21, HRC futures at Shanghai Futures Exchange are standing at RMB 3,366/mt ($491/mt), increasing by RMB 87/mt ($12.7/mt) or 2.65 percent since April 14, while rising by 0.72 percent compared to the previous trading day, April 20.

$1 = RMB 6.8594