Ex-China offer prices of cold rolled coil (CRC) have risen sharply amid the surging trends of local prices and ferrous metal futures prices, and also due to strong demand.
At present, export offers for CRC given by major Chinese mills are at $1100-1120/mt FOB for June shipment, with the average offer prices rising by $140/mt from $940-1,000/mt on April 28.
However, lower prices are still available from China. For instance, yesterday, May 11, one of the main Chinese producers announced its CRC price at $1,040/mt FOB, while requiring potential buyers to bear the risk of any price change if the current 13 percent export tax rebate policy for CRC and HDG is change suddenly. It has been expected that the rebate in question will be cut to four percent, but no official statement has been disclosed yet.
The tradable value has been assessed by market sources at $1,030-1,040/mt FOB at the moment. Just before the Labor Day holiday (before the local market skyrocketed), deals were at $925/mt FOB.
Chinese CRC sellers have been active in exports as their prices are very competitive in the international market. As SteelOrbis reported earlier, ex-China CRC was sold at €1,100/mt CFR to southern Europe and at €1,115-1,120/mt CFR Antwerp. Turkey booked 45,000 mt of cold rolled full hard (CRFH) material from China at around $950-960/mt CFR in late April-early May. At the same price, 10,000 mt of ex-China material was sold to Egypt.
“The anticipated production restrictions, declining inventory, and the peak season for CRC in the local market have all bolstered ex-China CRC prices. Ferrous metal futures prices in China have seen sharp rises following the Labor Day holiday amid expectations of possible inflation against the big rises in global commodity prices, which will likely contribute to further increases in CRC export offer prices in the coming period,” an international trader told SteelOrbis.
During the given week, domestic CRC prices have risen sharply amid surging ferrous metal futures prices and increasing iron ore prices. However, downstream users have started to be cautious as regards concluding purchases following the continuous rises in CRC prices, though relatively low inventory levels have resulted in prevailing bullish sentiments among market players. It is expected that CRC prices in the Chinese domestic market will likely increase again in the coming week.
Average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 7,083/mt ($1,103/mt) ex-warehouse, moving up by RMB 957/mt ($149/mt) compared to April 28, according to SteelOrbis’ information.
As of May 12, HRC futures at the Shanghai Futures Exchange are standing at RMB 6,683/mt ($1,040/mt), increasing by RMB 992/mt ($154/mt) or 17.4 percent since April 28.
$1 = RMB 6.4258