Ex-China HRC offer prices have increased further following the rapid rise over the past week. The appreciation of the Chinese currency and the ongoing limited supply in the Asian market have contributed to traders’ bullish sentiments, though domestic HRC prices in China have indicated some negative corrections early this week.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $565-595/mt FOB, moving up by $20/mt on average compared to November 17. A latest hike of $10/mt was made early this week by some mills.
The tradable value for SS400 coils from China has reached $568-570/mt FOB, according to sources. Last week, a deal to Pakistan was heard at $585/mt CFR (translates to $570/mt FOB). A deal by a trader for Vietnam has been reported at close to this FOB level too. This means that the deal price level has increased by $8-10/mt on average from Thursday last week and by $15-18/mt over the past week.
A deal of ex-China SAE1006 HRC to Vietnam was reported at $594/mt CFR late last week, up from the previous contracts for the same grade at $580-590/mt CFR. At the moment, most bids from Vietnam have increased to $585/mt CFR or just slightly below, taking into account the limited supply volume and steadily increasing offers. Offer prices of ex-Taiwan, ex-Japan and ex-China SAE 1006 HRC used by re-rollers have been heard at $630/mt CFR, $620-640/mt CFR and $600-605/mt CFR Vietnam, respectively. The SteelOrbis reference price has been settled at $590-594/mt CFR, against $575-590/mt CFR last week.
“Though demand for HRC in the local market in China shrank, the demand from the overseas market has been stable, resulting in steelmakers raising their ex-China HRC prices,” an international trader told SteelOrbis.
During the given week, HRC prices in China have edged up slightly over the past week by RMB 35/mt ($5.3/mt) to RMB 4,100/mt ($623/mt) ex-warehouse on average. However, as it is getting colder and colder, demand from downstream users for HRC has started to slacken, and so market players have started to be cautious and a slightly daily decline in prices has been reported on Tuesday. Currently, inventory of HRC is at a relatively low level.
As of November 24, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,042/mt ($618.3/mt), decreasing by RMB 11/mt ($1.7/mt) or 0.27 percent since November 17.
$1 = RMB 6.5809