Ex-China HRC offers have edged up further as buyers from overseas markets have needed to replenish stocks and have been accepting higher prices. Moreover, the local market in China has been very strong with prices reaching new highs.
At present, export offers for boron-added SS400 HRC given by the major Chinese mills are at $930-950/mt FOB for June shipment, with a midpoint at $940/mt FOB, moving up by $35/mt on average compared to late last week. Steelmakers will have to bear the risks of the anticipated tax rebate cut.
The tradable price level has reached $915-925/mt FOB, up by the $25/mt on average week on week. Deals to traders were done at $880-900/mt FOB over the past week, while transactions to Latin America were mainly at $920/mt FOB. Some sources said that mills are not in a mood to provide prices below $930/mt FOB now, feeling that this price will be accepted soon in distant markets.
In the re-rolling SAE1006 HRC segment, offers from China have been in the wide range of $940-970/mt CFR Vietnam over the past week, and on Monday and Tuesday this week the tradable level for ex-China HRC in Vietnam has been $950-960/mt CFR, up from $930/mt CFR early last week.
“Some steel mills worried about how fast buyers will accept prices following the quick rises in ex-China HRC offer prices, while other steelmakers think offer prices may edge up further amid the expectations of future production restrictions,” an international trader told SteelOrbis.
During the given week, HRC futures prices in China have moved up, pushing up local prices in the spot market. Downstream users have been quite cautious at the current high levels of prices. However, the relatively low inventory levels have made steelmakers willing to raise their HRC offer prices.
Domestic HRC prices in China are at RMB 5,680-5,790/mt ($875-892/mt) ex-warehouse on April 27, with the average price level RMB 250/mt ($38.5/mt) higher as compared to April 20, according to SteelOrbis’ data. Compared with the price level on Monday, April 26, local quotations are RMB 30/mt ($4.6/mt) higher.
As of April 27, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,752/mt ($886/mt), increasing by RMB 323/mt ($49.8/mt) or 5.95 percent since April 20.
$1 = RMB 6.4924
