Ex-China HRC offer prices have moved up due to the production restrictions in northern China, rising iron ore prices and the firm trend in the local market.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $525-535/mt FOB for late November shipment, edging up by $12.5/mt on average compared to last week and up $5/mt compared to yesterday, August 31.
Two sales of ex-China SS400 HRC have been reported to Vietnam at $520-525/mt CFR over the past week. But amid the further increase in the tradable value in Vietnam and other import markets, at the moment most sources assess the workable level for Chinese HRC at $515/mt FOB (around $530/mt CFR Vietnam) at the minimum, while most Chinese mills are not ready to negotiate even at $520/mt FOB.
“Production restrictions have been heard in northern China, which will likely shrink steel output and bolster market players’ sentiments, pushing up ferrous metal futures prices and exerting a positive impact on ex-China HRC offer prices,” an international trader told SteelOrbis.
During the given week, Jiangsu Province-based Shagang Group, China’s largest private steelmaker, has raised its local offer prices for Q235 5.5 mm x 1,500 mm HRC by RMB 150/mt ($22/mt) to RMB 4,300/mt ($628/mt) ex-works, which positively affected market players’ sentiments and pushed up HRC prices in the spot market. However, inventory of HRC has indicated some rises so far.
Domestic HRC prices in China are at RMB 3,960-4,070/mt ($578-594/mt) ex-warehouse on September 1, with the average price level RMB 20/mt ($2.9/mt) higher as compared to August 25 according to SteelOrbis’ data.
As of September 1, HRC futures at the Shanghai Future Exchange are standing at RMB 4,037/mt ($589/mt), increasing by RMB 99/mt ($14.5/mt) or 2.5 percent since August 25.
$1 = RMB 6.8498
