Chinese hot rolled coil (HRC) export offers have been in chaos due to the slack demand from the overseas market and low offer prices from other sellers in the international market. The coronavirus pandemic has spread further worldwide, resulting in a critical situation in more countries, negatively affecting market players’ sentiments.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $415-435/mt FOB for late May delivery, stable compared to late last week but sharply down from $440-445/mt FOB early last week. At the same time, the latest deals from small volumes have been heard at $405/mt FOB. Some sources said that traders have been ready to offer in short positions even at lower levels, but, taking into account the strong competition, this would be still not enough to attract customers. “High inventories in the HRC market have exerted a negative impact on offer prices, while slack demand from overseas downstream users and severe competition have also impacted market players’ sentiments,” an international trader told SteelOrbis.
At the same time, India’s large integrated steel mills have aggressively cut their hot rolled coil (HRC) export prices further - to $380-390/mt FOB to the Asian market, which has been reflected in deals to Vietnam and even China.
The tradable value for imported HRC in Vietnam has slipped to $395-400/mt CFR, far below offer levels from Chinese producers.
The weaker demand and high inventories in the local Chinese market have lowered support for HRC prices. Meanwhile, market players are under strong pressure from tight liquidity and thus have decreased their sales prices.
Domestic HRC prices in China are at RMB 3,290-3,310/mt ($464-467/mt) ex-warehouse on March 31, with the average price level RMB 65/mt ($9.2/mt) lower as compared to March 24, according to SteelOrbis’ data.
As of March 31, HRC futures at the Shanghai Future Exchange are standing at RMB 3,071/mt ($433/mt), decreasing by RMB 258/mt ($36.4/mt) or 7.75 percent since March 24.
$1 = RMB 7.0851
