Ex-China hot rolled coil (HRC) offer prices have edged down further amid declining HRC prices in the local market, still falling futures prices, and prevailing bearish sentiments. More deals have been reported to key Asian customers as prices from Chinese sellers have become the most competitive recently.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $510-525/mt FOB for November shipment, moving down by $7.5/mt on average compared to last week following the downtrend seen in the previous week.
The tradable value for SS400 has declined by another $5/mt over the past week to $505-510/mt FOB this week. A small-volume contract (for about 1,000 mt) of ex-China SS400 HRC has been closed at $528-530/mt CFR to Pakistan for October delivery. This price level is equivalent to around $513-515/mt on FOB basis, but it was connected with earlier delivery compared to what mostly available in the market. The workable level in Pakistan is still at $520-525/mt CFR.
Also, a few deals for SAE1006 HRC have been reported to Vietnam at $515-520/mt CFR, while a deal for SAE1006 from China was reported at $525/mt CFR last week.
“Continuously declining HRC futures prices have exerted a negative impact on market players’ sentiments, while demand has not been as good as what they expected for the traditional peak season, also negatively affecting the local HRC market, which will likely drag down ex-China HRC prices and stimulate HRC export volumes in the near future,” an international trader told SteelOrbis.
During the given week, HRC prices in the futures market have indicated decreases, negatively affecting market players’ sentiments and dragging down prices in the spot market. Though it is the traditional peak season, demand has been slacker than what market participants had expected. Most traders have decided to reduce booking orders from steelmakers, lowering potential risks. However, inventory has been at a relatively low level, providing support for HRC prices.
Domestic HRC prices in China are at RMB 3,850-3,890/mt ($567-573/mt) ex-warehouse on September 22, with the average price level RMB 60/mt ($8.8/mt) lower as compared to September 15, according to SteelOrbis’ data.
As of September 22, HRC futures at Shanghai Futures Exchange are standing at RMB 3,652/mt ($538/mt), decreasing by RMB 78/mt ($11.5/mt) or 2.1 percent since September 15.
$1 = RMB 6.7872