Ex-China HRC prices rise slightly, trade shifts to alternative markets amid weak overall conditions

Chinese HRC export prices have edged up slightly over the past week, supported by marginally improved demand in selected markets, while overall trading conditions remain uneven. Major Chinese mills have managed to secure orders, particularly in alternative destinations such as Pakistan and Bangladesh, as traditional outlets in the Middle East and Vietnam remain constrained. At the same time, despite some positive signals in export activity, the market fundamentals have shown little change, with sentiment largely stable.

More specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $490-505/mt FOB, with a midpoint at $497.5/mt FOB, up by $2.5/mt week on week. Besides, offers from smaller private mills have been voiced at around $482-490/mt FOB, up by $3/mt on the lower end of the range over the past week.

Meanwhile, offers from Chinese traders have been estimated at $483-495/mt FOB, versus $480-490/mt FOB last week. According to sources, a deal for around 10,000 mt of ex-China HRC is reported to have been done in Southeast Asia at $484/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 $510/mt CFR, mainly the same as last week. “Offers from mills like Angang and Shougang have been voiced at $500/mt FOB, while Anfeng and Zongheng have been offering at $482/mt FOB,” a market insider said, adding, “ Other big mills like Yongfeng and Yanshan have been offering their HRC at $490/mt FOB and $505/mt FOB, respectively.”

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. Thus, several deals are reported to have been done for ex-China Q195 and Q235 HRC at $505/mt CFR and $512/mt CFR, respectively, while offers for Chinese Q235 HRC to Pakistan have been reported at $515/mt CFR and above. Furthermore, offers for Chinese 1.6-2 mm HRC to Bangladesh have been voiced at $520/mt CFR.

Offers for ex-Chinese Q195 HRC through traders to Turkey have been estimated at $545/mt CFR and above, which translates to around $490/mt FOB. 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 $550/mt CFR, the same as last week, while offers in Saudi Arabia for 1.2 mm HRC have been voiced at $610-615/mt CFR, with a few bookings reported to have been done at the abovementioned levels.

“The steel market remains anchored in its usual cycle - stable domestic pricing, somewhat stronger export demand, and no significant change in underlying fundamentals,” a Chinese market insider told SteelOrbis, adding, “While HRC and coated steel export orders show some improvement, the broader Chinese steel market continues to move along its familiar path, with raw materials easing slightly and sentiment largely unchanged.”

In the meantime, average HRC prices in the Chinese domestic market have edged up slightly compared to the previous week amid the increasing HRC futures prices and improved sentiments due to the ceasefire in the Middle East. In particular, domestic HRC prices in China have settled at RMB 3,330-3,440/mt ($485-501/mt) ex-warehouse on April 14, with the average price level RMB 10/mt ($1.5/mt) higher compared to that recorded on April 7, according to SteelOrbis’ data.

During the given week, HRC futures prices have edged up slightly as well, exerting a positive impact on prices in the spot market. Cautious sentiments have prevailed among market players, and so sales of low-priced HRC have indicated a somewhat better performance. However, transaction volumes have not increased sharply, signalling that overall market trading sentiment remains subdued.

As of April 14, HRC futures at Shanghai Futures Exchange are standing at RMB 3,279/mt ($478/mt), increasing by RMB 4/mt ($0.6/mt) or 0.1 percent since April 7, while up 0.12 percent compared to the previous trading day, April 13.

$1 = RMB 6.8593