Ex-China HRC prices stable to firm, but post-holiday recovery meets external headwinds

Although the Chinese New Year holiday has officially ended and consumption is expected to recover gradually, ex-China HRC prices have remained largely stable amid ongoing global uncertainties. The export market is closely assessing the impact of the war in the Gulf region, with freight rates rising significantly, particularly for shipments to sensitive destinations. Mills and traders have kept their export base prices broadly stable, although some have attempted to push slightly higher levels in their latest offers.

More specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $470-485/mt FOB, with a midpoint at $477.5/mt FOB, up by $2.5/mt week in week. However, offers from smaller private mills have remained at around $470-475/mt CFR, compared to $465-475/mt FOB last week. 

At the same time, offers from Chinese traders have been voiced at $465-470/mt FOB, up by $5/mt on the lower end of the range over the past 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 April shipment voiced at $485-490/mt CFR Vietnam this week.

Besides, Chinese Q195 HRC offers through traders to Turkey have been estimated at $510/mt CFR for April shipment, up by $5-10/mt week on week, while offers for SAE1006 HRC have been voiced at $519/mt CFR, according to sources.

“The export market is closely assessing the impact of the war, with freight rates increasing significantly, particularly for shipments to sensitive destinations. Mills have kept their export base prices unchanged, and some bids have been accepted with full performance of commitments,” a market insider told SteelOrbis.

“At ports, raw material prices remain firm. Iron ore arrivals have declined and coke prices are expected to rise further due to potential oil and gas supply shortages. Meanwhile, the domestic market is awaiting the outcome of the high-level meetings in March, as well as the start of the traditional spring demand season,” another source said.

In the meantime, average HRC prices in the Chinese domestic market have edged down compared to the previous week amid relatively high inventories and cautious sentiments among market players. In particular, domestic HRC prices in China have settled at RMB 3,260-3,370/mt ($472.5-488/mt) ex-warehouse on March 3, with the average price level RMB 13/mt ($1.9/mt) lower compared to that recorded on February 24, according to SteelOrbis’ data. 

Furthermore, as of March 3, HRC futures at Shanghai Futures Exchange are standing at RMB 3,219/mt ($466.5/mt), increasing by RMB 24/mt ($3.5/mt) or 0.75 percent since February 24, while decreasing by 0.03 percent compared to the previous trading day, March 2. 

$1 = RMB 6.9088