Ex-China HRC offer prices have edged up in the past week following the downtrend in the previous week amid the fresh rises seen in the local Chinese market on Tuesday, July 6.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $880-920/mt FOB for August shipment, with a midpoint at $900/mt FOB, moving up by $10/mt on average compared to June 29. “The expected production resumption in Tangshan, the main steelmaking hub in China, following the 100th anniversary of the founding of the Communist Party of China pushed up iron ore prices, which positively affected HRC futures prices,” an international trader told SteelOrbis. In addition, the expected reduction of crude steel production in the second half, which has been sought by the government, has positively impacted the outlook for the HRC segment.
The tradable price level for SS400 coils has improved to $880/mt FOB from $850-860/mt FOB a week before. The lowest deals for this grade were done at $860/mt CFR to Vietnam last week for position cargoes, but this price level has not been available in the market any more, even from traders, sources said.
The workable price level for SAE1006 HRC from Chinese small mills and traders has been reported at $890-900/mt FOB. After some bookings to Vietnam at $880-920/mt CFR for small SAE1006 HRC cargoes last week, buyers have been in a waiting mood, receiving offers from China mainly at $920-930/mt CFR.
During the given week, local HRC prices in the Chinese domestic market have seen big rises amid the increasing trend in the futures market and improved sentiments among market players. Downstream users have mostly held a wait-and-see stance towards the market prospects, but expectations of lower demand by the end of the year have supported sentiment.
Domestic HRC prices in China are at RMB 5,440-5,600/mt ($842-867/mt) ex-warehouse on July 6, with the average price level RMB 135/mt ($21/mt) higher as compared to June 29, according to SteelOrbis’ data. Compared with the price level on Monday, July 5, average local quotations are RMB 120/mt ($19/mt) higher.
As of July 6, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,604/mt ($867.5/mt), increasing by RMB 289/mt ($44.7/mt) or 5.43 percent since June 29.
$1 = RMB 6.4613