Ex-China HRC offer prices have edged up slightly early this week and many mills have withdrawn offers to international customers as rumours about a possible export tax rebate cut have emerged again in the market this week. Local HRC prices have increased week on week, but have weakened on March 16 in reaction to a possible increase in supply in the local market.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $735-765/mt FOB for May shipment, with a midpoint at $750/mt FOB, moving up by $2.5 on average compared to Monday, March 16, but $2.5/mt lower than on March 9.
The lowest deal price level for ex-China SS400 grade HRC has been at $720-725/mt FOB, up by $5/mt week on week. The tradable value for SS400 HRC from Chinese traders to Pakistan has increased to $760/mt CFR, which is equivalent to $720-730/mt FOB. Moreover, to some distant destinations the tradable level is up to $750-760/mt FOB.
Some small volumes for SAE1006 HRC were traded from traders to Vietnam at $760/mt CFR late last week, but overall offer volumes were limited at such low levels. A fresh deal for 30,000 mt of re-rolling grade Indian HRC has been done to Vietnam at $760/mt CFR, up by $10/mt compared to last week.
“Deal prices of ex-India HRC have been heard higher than in the previous period, while market players thought HRC prices in the export market may see further rises. Moreover, the Chinese government has announced policies to stimulate the consumption of vehicles and home appliances, which will exert a positive impact on the HRC market in the near future,” an international trader told SteelOrbis.
During the given week, local HRC prices have moved up. But the sentiment has not been so bright lately. Downstream users have been unwilling to conclude purchases at high prices, though low-priced HRC has been easily accepted by buyers. Inventory of HRC has risen slightly, while still remaining at relatively low levels, bolstering HRC prices to some extent. Rumours emerging about a possible cut of the export tax rebate from 13 percent to 8-9 percent have increased worries about higher volumes coming to the local market.
Domestic HRC prices in China are at RMB 4,890-4,950/mt ($752-762/mt) ex-warehouse on March 16, with the average price level RMB 70/mt ($11/mt) higher as compared to March 9, according to SteelOrbis’ data. Compared with the price level on Monday, March 15, local quotations are RMB 15/mt ($2.3/mt) lower.
As of today, March 16, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,931/mt ($759/mt), decreasing by RMB 111/mt ($17/mt) or 2.3 percent since March 9. HRC futures in China have lost RMB 80/mt ($12/mt) compared to yesterday.
$1 = RMB 6.5029