Ex-China HRC improve after local gains, easing of output curbs restrains optimism  

Tuesday, 01 June 2021 17:28:14 (GMT+3)   |   Shanghai

Ex-China HRC offer prices have edged up in the past week following the declines in the previous week, amid the bottoming-up seen in ferrous metal futures prices and in the local spot market in China. Nevertheless, the optimism has been somewhat restrained by the recent news regarding the easing of production restrictions in Tangshan, which may increase supply in the market.

At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $930-1,000/mt FOB for July shipment, with a midpoint at $965/mt FOB, moving up by $25/mt on average compared to May 25, and up by $5/mt compared to yesterday, May 31. “HRC prices in the Chinese domestic market have seen rises, positively affecting export offers, following previous sharp decreases. There is limited room for HRC to edge down,” an international trader told SteelOrbis.

The tradable price level for SS400 coils has increased to $900-915/mt FOB lately, up from the level of $890/mt FOB last week and there were some deals even below this. Position cargoes to Vietnam from China have mainly been available at above $925/mt CFR, corresponding to $900/mt FOB.

The workable price level for SAE1006 HRC from Chinese small mills and traders has been reported at $910-925/mt FOB, versus $900-920/mt FOB early last week.

During the given week, local HRC prices in China have seen slight rises amid the rebounding trend in HRC futures prices and improved sentiments among market players. Inventory of HRC has not seen big changes, remaining at relatively low levels, which has bolstered prices. Nevertheless, the recent news about the relaxation of production restrictions at BOFs in Tangshan have exerted pressure on the market mood on June 1.

Domestic HRC prices in China are at RMB 5,430-5,550/mt ($854-873/mt) ex-warehouse on June 1, with the average price level RMB 90/mt ($14.2/mt) higher as compared to May 25, according to SteelOrbis’ data. However, compared with the price level on Monday, May 31, average local quotations are RMB 80/mt ($3/mt) lower.

As of June 1, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,437/mt ($855/mt), increasing by RMB 156/mt ($24.5/mt) or 2.95 percent since May 25.

$1 = RMB 6.3572

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