Chinese hot rolled coil (HRC) export offers have increased again, supported by firm prices in the local market and still good demand. However, demand for Chinese HRC in the international market has stayed limited as customers have been more cautious towards purchases. Moreover, sentiments in the local Chinese market are not as good as in November.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $465-475/mt FOB, up $5/mt from December 2 and $10-15/mt higher compared to the level on November 26.
At the same time, customers in Vietnam have been more interested in HRC of other origins, while overall trading has slowed. Ex-India HRC SAE1008 has been offered at $470/mt CFR Vietnam, while ex-South Korea has been offered at $475/mt CFR Vietnam. “Japan-origin HRC is offered at $478/mt CFR Vietnam [for SAE1008],” a trader told SteelOrbis. At the same time, the workable level has been still mostly at $465/mt CFR, in line with the previous deals last week.
Chinese producers have given higher offer prices to the international market due to the still firm local market. During the past week, domestic HRC prices in China have increased to RMB 3,740-3,870/mt ($533-551/mt) ex-warehouse, with the average price level RMB 15/mt ($2.1/mt) higher as compared to November 26, according to SteelOrbis’ data. In some areas, the supply volume is still not high, which has supported prices. However, demand has not been as good as earlier and so the outlook is not very bright.
HRC futures prices at Shanghai Futures Exchange (SHFE) are standing at RMB 3,578/mt ($509.5/mt) on December 3, up 1.3 percent from November 26. However, they gained just RMB 3/mt ($0.4/mt) from December 2. Hesteel has raised its offer prices for Q235 5.5 mm x 1,500 mm HRC by RMB 120/mt ($17.1/mt) to RMB 3,820/mt ($543.4/mt) for December shipment, on ex-works basis, which will provide a certain degree of support for the HRC market.