Ex-China HRC prices stable after holiday, weak demand and trade barriers keep activity subdued

After several days of holidays in China, the market resumed work today, April 7, with no significant changes in ex-China HRC prices. Export offers have remained largely stable, while trading activity continues to be subdued across key destinations. Demand in the Middle East is still constrained by the ongoing war, while in Southeast Asia - particularly Vietnam - the recent implementation of antidumping duties has further limited Chinese export flows. Meanwhile, in Turkey, current offer levels from Chinese suppliers are widely considered to be too high for most buyers, resulting in cautious and limited purchasing activity.

More specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $490-500/mt FOB, with a midpoint at $495/mt FOB, the same as last week. Besides, offers from smaller private mills have been voiced at around $479-490/mt FOB, mainly the same as last week. “Offers are varying from mill to mill, with the prices from such mills as Anfeng heard at $479/mt FOB, down by $2/mt since last week, while Yonfeng and Donghua are offering at $490/mt FOB, $487/mt FOB, respectively,” a market insider told SteelOrbis.

Meanwhile, offers from Chinese traders have been estimated at $480-490/mt FOB, the same as last week. Ex-China 2,000 mm Q235 HRC offers in Vietnam are still rare due to the absence of non-VAT offers, with indicative offers with VAT for May shipment voiced at $510/mt CFR, mainly the same as last week. Besides, offers for ex-Chinese Q195 HRC offers through traders to Turkey have been estimated at $540-545/mt CFR, up by $5/mt on the lower end of the range week on week, 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.

“Following the short holiday, the market remains largely unchanged. Steel output edged down at the end of March, while demand stayed weak, keeping prices stuck at current levels,” a market insider told SteelOrbis.

“April has yet to show positive signals, leaving stocking neutral. The export market remains mixed, with leading HRC offers at around $500/mt FOB, while local suppliers achieve slightly higher prices amid slow and cautious trading,” another source said.

In the meantime, average HRC prices in the Chinese domestic market have indicated slight decreases compared to the previous week amid continuous declines in HRC futures prices. In particular, domestic HRC prices in China have settled at RMB 3,330-3,420/mt ($483-496/mt) ex-warehouse on April 7, with the average price level RMB 13/mt ($1.9/mt) lower compared to March 31, according to SteelOrbis’ data.

Following the Tomb-Sweeping Day holiday (April 4-6), downstream users have been unwilling to conclude purchases of HRC amid the prevailing cautious sentiments among market players. The ongoing war in the Middle East has negatively affected market sentiments. HRC futures prices have moved down for five consecutive trading days, exerting a negative impact on the prices in the spot market. It is thought that HRC prices in the Chinese domestic market will soften slightly in the coming week.

As of April 7, HRC futures at Shanghai Futures Exchange are standing at RMB 3,275/mt ($475/mt), decreasing by RMB 19/mt ($2.8/mt) or 0.6 percent since March 31, while decreasing by 0.37 percent compared to the previous trading day, April 3.

$1 = RMB 6.8854