Ex-China HRC offer prices have edged up slightly amid rises in low-end prices due to the appreciation of the Chinese currency, bullish sentiments in the stock market and decent transaction activities in the local market.
China’s export positions weaker
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $450-465/mt FOB for late September shipment, moving up by $2.5/mt on average compared to last week.
Following lower-priced deals from China at $437/mt CFR and $448-450/mt CFR to Vietnam in the second half of June, as SteelOrbis reported earlier, the focus of Chinese exporters has returned more to the local market for now.
In Vietnam, competition has increased again. Offers for ex-Russia coils have emerged in Vietnam at $435/mt CFR after some pause. Indian mills were offering at $435-440/mt CFR and a sale by a trader at $432/mt CFR has been registered. Japanese coils were traded at $450/mt CFR last week, while one mill from South Korea has been giving the same price level.
“Though rainy weather and floods negatively affected demand for HRC in the local market, transaction activities have been good, and so Chinese exporters have been unwilling to lower prices in the export market,” an international trader told SteelOrbis.
Import interest remains, but new ex-India bookings unlikely in near future
The latest ex-India HRC deal to China was heard at $442.5/mt CFR a week ago, but after that many Indian mills decided to suspend offers to China, taking into account growing Sino-Indian tensions. Most sources said that there were no official suspensions of offers, but sellers and buyers are more cautious. Moreover, the increased strength of the rupee compared to the US dollar has made exports less attractive than earlier.
Offer prices of ex-South Korea HRC have been heard at $455/mt CFR China recently. As SteelOrbis reported last week, ex-Taiwan coils were sold to China in the second half of June at close to $460/mt CFR.
Domestic HRC prices rise in China as demand still exists
During the given week, high-priced HRC from steelmakers in China has provided support for traders’ offer prices. Though continuing rainy weather resulted in slacker demand for HRC in general, some slowdown of production made the market more or less balanced. Cautious sentiments have prevailed among market players, which will exert a negative impact on the future HRC market. However, currently, HRC inventory is at relatively low levels and so suppliers are unwilling to lower HRC sales prices.
Domestic HRC prices in China are at RMB 3,740-3,800/mt ($532-541/mt) ex-warehouse on July 7, with the average price level RMB 35/mt ($5.0/mt) higher as compared to June 30, according to SteelOrbis’ data.
As of July 7, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,629/mt ($516/mt), increasing by RMB 26/mt ($3.7/mt) or 0.7 percent since June 30.
$1 = RMB 7.031