Ex-China HRC offer prices have moved down significantly over the past week amid the worsening of the situation in the domestic market, declining HRC futures prices and lower iron ore prices in China. Some steelmakers have cut their export offer prices, while lower-priced offers for position cargoes from traders have also appeared in the market.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $690-730/mt FOB for March shipment, moving down by $17.5/mt on average compared to December 22.
A deal price for ex-China boron-added SS400 HRC has been heard at $660/mt FOB or $670/mt CFR to Vietnam, according to sources. Most bids have been reported at this price level, though even traders are not ready to provide a price below $670-675/mt FOB at the moment. The tradable price level was at $685-700/mt FOB on December 22, according to SteelOrbis. At the moment, it is assessed at $660-670/mt FOB.
Prices for ex-China SAE1006 HRC have been showing less drastic changes. According to sources, Baosteel has traded 10,000 mt of high grade re-rolling coils at $737/mt CFR to Vietnam. This indicates an increase from the previous booking for 20,000 mt at up to $725/mt CFR last week. But in addition, this week position cargoes from Chinese traders have been offered at a lower price level, at about $700/mt CFR, and one deal has been heard at $680/mt CFR for Chinese SAE1006 HRC. “This is very cheap, even though bids are at this level. The price range is too wide in Vietnam nowadays,” an Asian trader said.
Vietnam-based Hoa Phat has offered re-rolling grade coils at $690/t CFR to the local market for March shipment, but for limited volumes.
“The downward corrections in iron ore prices, more sporadic cases of Covid-19 in many regions of China, and extremely cold weather hitting China negatively have affected ex-China HRC offer prices,” an international trader told SteelOrbis.
During the given week, HRC prices in the domestic market in China have indicated sharp declines amid decreasing HRC futures prices and slack demand due to the cold weather. At the same time, inventory levels of HRC have seen certain rises, exerting a negative impact on prices. Currently, traders are worried about the future HRC market and choose to sell at lower prices. It is thought that HRC prices in the Chinese domestic market will likely move down amid the extremely cold weather expected to hit China in the coming week.
Domestic HRC prices in China are at RMB 4,400-4,590/mt ($672-701/mt) ex-warehouse on December 29, with the average price level RMB 535/mt ($81.7/mt) lower as compared to December 22, according to SteelOrbis’ data. Compared with the price level on Friday, December 25, local quotations have lost RMB 225/mt ($34.4/mt).
As of December 29, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,401/mt ($672.4/mt), decreasing by RMB 297/mt ($45.4/mt) or 6.32 percent since December 22.
$1 = RMB 6.5451
