Ex-China HRC prices steady overall, but regional divergence emerges

This week, ex-China HRC price trend has remained cautious, varying by destination. While most mills and traders have kept offers stable overall, some regional differences have emerged. In Vietnam, prices have edged slightly higher, reflecting tighter availability. In contrast, some Middle Eastern buyers have been seeing lower prices, particularly in the case of occasional non-VAT offers, contributing to a more subdued tone in that market.

More specifically, export offers for boron-added SS400 HRC from large Chinese mills have settled at $445-460/mt FOB, with a midpoint at $452.5/mt FOB, the same as last week. Meanwhile, smaller mills have been offering their HRC at around $440-445/mt CFR, up by $5/mt on the lower end of range week on week, though, according to sources, offers from small non-VAT mills have been still voiced at $435/mt FOB level.

In the meantime, the tradable price for ex-China SS400/Q235 HRC has been estimated at $435-445/mt FOB, the same as last week, however, lower offers at around $430/mt FOB have been also occasionally reported in the market this week. In particular, although most ex-China SS400 HRC offers in the UAE have been reported at $475-485/mt CFR, the same as last week, a rumour about a deal for ex-China coils signed at $465-470/mt CFR has been circulating in the market. Besides, according to sources, while offers for ex-China Q195 HRC in Turkey have been voiced at $470-475/mt CFR, offers from non-VAT traders have been reported at around $465/mt CFR level.

Meanwhile, offers for ex-China Q235 HRC in Vietnam have settled at around $455-460/mt CFR, up by $5-10/mt week on week, while offers for Q195 HRC have settled at $445/mt CFR.  Furthermore, offers for ex-China Q235 HRC from traders in Pakistan have been estimated at $450-455/mt CFR, while Q195 HRC offers have been estimated at $445-448/mt CFR.

In the meantime, average HRC prices in the Chinese domestic market have edged down compared to the previous week amid the prevailing cautious sentiments. In particular, domestic HRC prices in China have settled at RMB 3,230-3,480/mt ($449-483/mt) ex-warehouse on June 17, with the average price level RMB 20/mt ($2.8/mt) lower compared to that recorded on June 10, according to SteelOrbis’ data. 

During the given week, traders and downstream users have little confidence for the future market, exerting a negative impact on HRC prices. The widespread rainy weather affected the lower and middle reaches of the Yangtze River and southern China, while high temperature hit northern China, both slackening the demand for HRC. In the traditional summer lull, the demand is unlikely to improve, which will negatively affect the HRC prices. It is expected that HRC prices in the Chinese domestic market will edge down slightly in the coming week.

As of June 17, HRC futures at Shanghai Futures Exchange are standing at RMB 3,093/mt ($430/mt), increasing by RMB 4/mt ($0.6/mt) or 0.13 percent since June 10, while rising by 0.13 percent compared to the previous trading day, June 16.    

 $1 = RMB 7.1746