Ex-China HRC prices stronger amid good sentiment, customers not in hurry to accept

Following price increases for ex-China HRC last week, this week another upward adjustment has been reported by Chinese suppliers, though most buyers have been holding back from new purchases, bidding at lower levels.   

More specifically, export offers for boron added SS400 HRC from large Chinese mills have settled at $580-590/mt FOB, with the midpoint at $585/mt FOB, up by $10/mt over the past week. “Most mills have been offering at $585/mt FOB on average, Rizhao offers at $580/mt FOB, Benxi at $590/mt FOB,” a market sources said. However, several deals have been reported from mills at $575/mt FOB this week, to the Middle East in particular, which corresponds to around $598-600/mt CFR.   

Thus, the tradable level for ex-China SS400 HRC has been estimated at $565-575/mt FOB, depending on destination, up by $10-15/mt week on week and up by $25/mt over the past two weeks. Offers in Vietnam have been heard at $575-585/mt CFR, versus $565-570/mt CFR last week, while customers in Pakistan have received Chinese SS400 HRC offers at $590/mt CFR, up by $10/mt week on week. Offers in Turkey have been heard at $620/mt CFR, as compared to $600/mt CFR last week.   

In the SAE1006 HRC segment, ex-China offers in Vietnam have increased to $590-600/mt CFR, versus $585-590/mt CFR last week. Offers for ex-China SAE1006 in Pakistan have been voiced at $600-605/mt CFR, up by $10/mt week on week.   

“Trade has been limited as buyers are not ready to accept higher offers, while some still believe $555/mt FOB [for SS400] could be possible,” a market insider told SteelOrbis.  

Domestic HRC prices in China are at RMB 4,080-4,220/mt ($572-592/mt) ex-warehouse on August 1, with the average price level RMB 100/mt ($14/mt) higher compared to that recorded on July 25, according to SteelOrbis’ data.   

HRC prices in the Chinese domestic market have seen an uptrend amid increasing HRC futures prices and rising coke prices. Meanwhile, market sentiment has been positively affected by Chinese policymakers’ determination to loosen the restrictions on the real estate sector and stimulate economic development. Demand from downstream users has not seen a significant improvement. However, some traders chose to negotiate the HRC prices last week, aiming to bring in funds and ease financial pressure at the end of month. Major Chinese steelmaker Shagang Group has hiked its HRC price for August by RMB 200/mt ($28/mt), which will provide support for the HRC market.  

As of August 1, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,088/mt ($573/mt), increasing by RMB 71/mt ($10/mt) or up by 1.8 percent since July 25.  

$1 = RMB 7.1283