Ex-China offer prices of cold rolled coil (CRC) have indicated slight drops over the past week due to the impact from the coronavirus, especially with the spread of the epidemic being heard in more countries.
At present, export offers for CRC given by major Chinese mills are at $505-510/mt FOB for late April delivery, down $2.5/mt on average compared to February 19. However, deals have been heard at $500-505/mt FOB to Southeast Asia and South America.
During the given week, most downstream users have resumed production gradually, with transaction activities in the local market seeing some improvements. Market players’ sentiments have improved to some extent, while they have been seeking to sell due to increasing pressures from rising inventory levels and tight liquidity. However, the spread of the coronavirus has been reported in more countries, for instance, in South Korea, Japan, Iran and Italy, among others, arousing market players’ concerns.
Nevertheless, it is possible that Chinese steel mills will attempt to increase prices in the near future, as has already happened in the HRC segment. Some foreign buyers have already reported rare official offers at $515-520/mt FOB from China.
Moreover, average domestic 1.0 mm cold rolled coil spot prices in China are at RMB 4,150/mt ($591.8/mt) ex-warehouse, which is RMB 57/mt ($8.1/mt) higher as compared to February 19, according to SteelOrbis’ information.
As of February 26, HRC futures at the Shanghai Future Exchange are standing at RMB 3,461/mt ($493.5/mt), increasing by RMB 56/mt ($8.0/mt) or 1.6 percent since February 19.
$1 = RMB 7.0126