Ex-China HRC prices weaken before long holiday after decline in futures prices

Although export offers for Chinese HRC from big mills have remained relatively stable this week, offers from both traders and smaller mills have shown at least a $10/mt decrease given the sluggish demand ahead of the eight-day public holiday (October 1-8) and the further declines observed in HRC and raw material futures prices.

Specifically, the price range for boron-added SS400 HRC from large Chinese mills have remained stable at $470–490/mt FOB, with a midpoint at $480/mt FOB, mainly for November shipment. Meanwhile, offers from smaller mills have been voiced mainly at $470/mt CFR, down by $5-10/mt week on week.

At the same time, offers from most Chinese traders have been voiced at $465-475/mt FOB, down by $10/mt week on week. In particular, ex-China 2,000 mm Q235/SS400 HRC offers in Vietnam have been voiced at $489-491/mt CFR, against $500-503/mt CFR at the beginning of last week. However, most customers’ bids have been voiced at below $490/mt CFR, according to sources.

Meanwhile, Chinese offers to other destinations like the Middle East have settled at $500-505/mt CFR UAE, down by $5/mt on the higher end of the range week on week. Besides, a deal for around 30,000 mt of ex-China S235JR HRC is reported to have been signed at $500/mt CFR UAE at the end of last week.

Furthermore, Chinese Q195 HRC offers to Turkey have declined by around $10/mt week on week to $505/mt CFR, while market insiders estimate the workable levels at $500/mt CFR and below.

At the same time, average HRC prices in the Chinese domestic market have moved down compared to the previous week amid declining HRC futures prices. In particular, domestic HRC prices in China have settled at RMB 3,410-3,520/mt ($480-496/mt) ex-warehouse on September 30, with the average price level RMB 96/mt ($13.5/mt) lower compared to that recorded on September 23, according to SteelOrbis’ data.

During the given week, HRC prices in the Chinese domestic market have declined amid worries about the market performance after the long holiday. Since the National Day holiday (October 1-8) is about to start, sellers have been ready to increase their HRC prices. Traders have mostly kept relatively low inventory levels, aiming to avoid potential risks after the long holiday.

As of September 30, HRC futures at Shanghai Futures Exchange are standing at RMB 3,253/mt ($458/mt), decreasing by RMB 87/mt ($12/mt) or 2.6 percent since September 23, while decreasing by 1.54 percent compared to the previous trading day, September 29.

 $1 = RMB 7.1055