Ex-China hot rolled coil (HRC) offer prices have moved down further amid the declining trend in the local market, lower trading activity ahead of holidays and prevailing cautious sentiments among market players.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $500-525/mt FOB, moving down by $5/mt on average compared to last week, following the downtrend seen in the previous week. Some steel mills have been offering at $500/mt FOB already as neither local demand now nor the outlook for October are good.
The tradable value for SS400 HRC has slipped to $497-503/mt FOB or $500/mt FOB on average. A small-volume deal to Pakistan has been done at $518/mt CFR from China, which is slightly above $500/mt on FOB basis, while in Vietnam the latest bookings for the same grade have been reported at $505/mt CFR. However, due to the negative mood in the market a number of customers have lowered their bids to $500/mt CFR and below for SS400 coils from China.
Last week, deals for SAE1006 HRC from Chinese traders were done at $515-520/mt CFR and buyers are waiting for lower prices from suppliers after the holidays, expecting to get $495-500/mt CFR in the future.
“Some steelmakers and traders chose to lower ex-China HRC offer prices amid the quiet market ahead of the long National Day holiday (October 1-8), while buyers in the overseas market have been unwilling to conclude purchases as they fear a downtrend after the long holiday,” an international trader told SteelOrbis.
During the given week, bearish sentiment has prevailed in the spot market in China. Downstream users in the local market have been unwilling to conclude purchases for HRC as the long National Day holiday is very close. Inventory in the HRC market has increased slightly, though it is still at relatively low levels.
Domestic HRC prices in China are at RMB 3,800-3,860/mt ($557-566/mt) ex-warehouse on September 29, with the average price level RMB 40/mt ($8.8/mt) lower as compared to September 22, according to SteelOrbis’ data.
As of September 29, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,674/mt ($539.5/mt), increasing by RMB 22/mt ($3.2/mt) or 0.6 percent since September 22.
$1 = RMB 6.8171