After the drop in ex-China HRC offer prices last week, the trend has reversed this week given the recovery of futures prices.
Most major Chinese mills have refrained from new export offers and several producers who remained in the market have decided to go higher, announcing their export offers for boron-added SS400 HRC at $780-790/mt FOB for March shipment, with a midpoint at $785/mt FOB, moving up by $15/mt compared to January 18. “HRC futures prices have moved up over the past week, exerting a positive impact on ex-China HRC offer prices, while steelmakers and traders sought to bolster their offer prices, though transaction activities have been quiet,” an international trader told SteelOrbis.
The tradable price level for SS400 coils has been heard at $765-770/mt FOB from traders to Vietnam, with one contract heard at the abovementioned level. In the meantime, several offers for Chinese coils have also been heard in Turkey at $860-880/t CFR for March shipment. “Offers to Turkey already reflect the uptrend. Most people expect prices to grow after the Lunar New Year holiday,” a Chinese trader said.
During the given week, HRC prices in the Chinese domestic market have seen rises amid the increasing trend in HRC futures prices. However, as the Chinese New Year is drawing very near, demand for HRC has remained slack, and so the price rises could be regarded just as an attempt instead of reflecting real transaction activities. It is expected that HRC prices in the Chinese domestic market will remain stable in the coming week because of the holidays, but some rebound may be seen after the Chinese New Year.
Domestic HRC prices in China are at RMB 4,830-4,940/mt ($762-779/mt) ex-warehouse on January 25, with the average price level RMB 53/mt ($8.4/mt) higher as compared to January 18, according to SteelOrbis’ data.
As of January 25, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,844/mt ($764/mt), increasing by RMB 135/mt ($21.3/mt) or 2.9 percent since January 18.
$1 = RMB 6.3418