Ex-China HRC prices show slight upward bias as mood improves, but trade remains slow

Sentiments among Chinese HRC mills have started to improve as the mood has changed slightly in the Chinese HRC market given the slight rebound in HRC futures prices. However, only a few suppliers have increased their offers slightly, while most producers have maintained their offers at the same levels as last week. Besides, offers from traders, which last week had declined, have rolled back this week, though trade has remained slow.

More specifically, export offers for boron-added SS400 HRC from most large Chinese mills have settled at $470-490/mt FOB, with a midpoint at $480/mt FOB, up by $5/mt week on week. “Only a few mills have decided to go higher, while most producers have kept offering their coils at $470-480/mt FOB, the same as last week,” a market insider told SteelOrbis. Meanwhile, offers from smaller mills have been voiced at $465-470/mt FOB, up by $5/mt over the past week, though, according to sources, offers from Chinese mill Anfeng Steel are still reported at $457/mt FOB.

Tradable prices for ex-China SS400/Q235 HRC have settled at $460-475/mt FOB, up by $3-5/mt week on week. Offers for ex-China Q235 and Q195 HRC have been voiced at $474-475/mt CFR, up by $5/mt week on week. Furthermore, following several deals signed at $487-488/mt CFR Turkey at the end of last week, this week most offers have settled at $490-500/mt CFR.

Besides, suppliers in the Middle East have reported most ex-China SS400 HRC offers at $495-510/mt CFR against $490-495/mt CFR last week, though no deals have been heard so far.

In the meantime, although HRC prices in the Chinese domestic market are still lower as compared to the previous week, as of Tuesday, February 18, local quotes have recovered slightly from the previous day, driven by signs of a rebound in HRC futures prices. Thus, domestic HRC prices in China have settled at RMB 3,430-3,530/mt ($478-492/mt) ex-warehouse on February 18, with the average price level RMB 30/mt ($4.2/mt) lower compared to that recorded on February 11, but up by RMB 5/mt ($0.69/mt) compared to yesterday, according to SteelOrbis’ data. 

According to sources, since China’s National People's Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC) are approaching, market sentiments will be bolstered, which will exert a positive impact on the HRC market. The inventory of HRC has been at relatively low levels, while demand is expected to improve, which will positively affect prices. At the same time, HRC futures prices have started to rebound, which also provides support for market sentiments.

As of February 18, HRC futures at Shanghai Futures Exchange are standing at RMB 3,430/mt ($478/mt), increasing by RMB 43/mt ($6/mt) or 1.3 percent since February 11, while up 1.3 percent compared to the previous trading day, February 17. 

$1 = RMB 7.1697