Ex-China HRC offer prices have surged amid rises in the local market as China’s National Development and Reform Commission (NDRC) has approved more water conservation projects which will boost the demand for steel. At the same time, firm local HRC demand has pushed up import offer prices. There are still many inquiries for imported HRC from China.
Export prices up sharply, demand subdued
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $465-485/mt FOB for late September shipment, moving up by $17.5/mt on average compared to last week. Buyers in the international market are unwilling to conclude purchases for ex-China HRC at the current high levels.
Bids for HRC from Vietnam are still at $440-445/mt CFR, while offers from India are starting from $450/mt CFR. There has been information in the market that one re-roller in Vietnam canceled two recent contracts, which is a bad signal for the future market development in Southeast Asia.
Import offers higher
In the import market in China, offers for ex-India HRC have been heard at $455-460/mt CFR, while the tradable level is still hardly above $450/mt CFR. As SteelOrbis reported earlier, China bought 150,000-200,000 mt of Indian HRC at $442-450/mt CFR over the past week.
Turkish suppliers have been offering at $470-480/mt CFR to China recently. And though there have been rumors about much lower price levels being available from Turkey, most sources said that it is not reasonable to offer at $450-455/mt CFR as freight rates to China have been on the rise and have reached $40-45/mt.
Offer prices for ex-South Korea and ex-Taiwan HRC have increased to $470-480/mt CFR China.
“The expectations for the future prospects for the HRC market are good amid stimulus policies and effective control of Covid-19 in China,” an international trader told SteelOrbis.
Local HRC prices strong, supported by rising futures prices
During the given week, rising trading as well the uptrend in the futures market and the stock market provided support for the HRC market. However, market players have started to adopt a wait-and-see stance, following the rising movement. Inventory of HRC has been at relatively low levels, bolstering HRC prices.
Domestic HRC prices in China are at RMB 3,840-3,890/mt ($549-556/mt) ex-warehouse on July 14, with the average price level RMB 95/mt ($13.6/mt) higher as compared to July 7, according to SteelOrbis’ data.
As of July 14, HRC futures at the Shanghai Future Exchange are standing at RMB 3,756/mt ($537/mt), increasing by RMB 127/mt ($18.1/mt) or 3.5 percent since July 7.
$1 = RMB 6.9996
