Chinese hot rolled coil (HRC) export offers have continued to be characterized by chaos due to the slack demand from overseas markets amid the worsening situation resulting from the coronavirus pandemic worldwide and even tighter competition than before.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $410-425/mt FOB for late May delivery, versus $410-430/mt FOB late last week. At the same time, the real price, which can be accepted by suppliers for concluding deals, has been heard at $400-410/mt FOB. “Severe competition from other suppliers has exerted a negative impact on ex-China HRC offer prices amid the quiet demand in the global market,” an international trader told SteelOrbis.
At the same time, HRC from Russia has been sold to Vietnam at $370-380/mt CFR recently, signaling the negative sentiment in the market.
The slack demand and comparatively high inventories in the local market have negatively affected HRC prices in the Chinese domestic market, and the redirecting of HRC supplies originally intended for the export markets back to the local market has also weakened HRC prices. Meanwhile, market players said strong pressure from tight liquidity will still push them to cut their sales prices.
Domestic HRC prices in China are at RMB 3,290-3,310/mt ($452.5-466.6/mt) ex-warehouse on April 7, with the average price level RMB 70/mt ($9.9/mt) lower as compared to March 31, according to SteelOrbis’ data.
As of April 7, HRC futures at the Shanghai Future Exchange are standing at RMB 3,063/mt ($432/mt), decreasing by RMB 8/mt ($1.1/mt) or 0.26 percent since March 31.
$1 = RMB 7.0939