Ex-China HRC offer prices have moved down over the past week amid the downward trend in HRC futures and domestic prices in China, impacted by the cold weather and the worsening Covid-19 pandemic.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $630-690/mt FOB for April shipment, with a midpoint at $660/mt FOB, moving down by $35/mt on average compared to January 12.
The tradable value has decreased from $650-660/mt FOB for this grade a week ago to $640-650/mt FOB, with this level heard from steel mills in northern China, though other steel mills officially hold their export offer prices at a higher level. One deal from a trader, according to sources, has been reported for ex-China SS400 HRC at $645/mt CFR Vietnam last week, which equals to $635/mt FOB, lower than most Chinese mills can offer at the moment. A contract for a position cargo to Pakistan was at $660/mt CFR, which corresponds to around $640-645/mt FOB.
For Chinese SAE1006 re-rolling grade HRC, offers have been heard at $670-685/mt CFR Vietnam, which equals $660-675/mt FOB. A deal for 5,000-10,000 mt of SAE1006 grade HRC from China was done at $670/mt CFR Vietnam last week. But bids from Vietnam have continued to go down to $660/mt CFR and below recently.
However, a number of large Chinese mills, which can offer thinner coils, have been keeping offers at higher levels - at $700-725/mt CFR Vietnam. Prices from other suppliers have been uncompetitive in Vietnam, all above $750/mt CFR.
“The downward movement in local HRC prices and HRC futures prices amid the worsening Covid-19 pandemic in northern China has negatively affected ex-China HRC prices,” an international trader told SteelOrbis.
During the given week, HRC prices in the Chinese domestic market have declined amid the overall downtrend seen in HRC futures prices and prevailing bearish sentiments against the backdrop of the worsening Covid-19 pandemic in northern China. At the same time, approaching the Chinese New Year holiday (February 11-17), demand has been sluggish, though the relatively low inventory levels have provided some support for HRC prices.
Domestic HRC prices in China are at RMB 4,440-4,500/mt ($684-694/mt) ex-warehouse on January 19, with the average price level RMB 40/mt ($6/mt) lower as compared to January 12, according to SteelOrbis’ data. Compared with the price level on Monday, January 18, local quotations are RMB 35/mt ($5/mt) lower.
As of January 19, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,384/mt ($675.7/mt), decreasing by RMB 78/mt ($12/mt) or 1.75 percent since January 12.
$1 = RMB 6.4883