Ex-China HRC offer prices have moved down over the past week, following losses in the local market. Even though today, on November 16, there has been slight improvement in the futures, overall sentiment is still bearish.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $800-820/mt FOB for January shipment, with a midpoint at $810/mt FOB, moving down by $40/mt compared to that recorded on November 9. “The downtrend in local HRC prices and HRC futures prices negatively affected the ex-China HRC offers,” an international trader told SteelOrbis.
At the same time, the tradable price level for SS400 coils, including the level from traders, offering in short positions for February shipment and beyond, has fallen to $770-780/mt FOB, down by $22.5/mt on average over the week, though most mills are try not go below $795-800/mt FOB for now. A contract for SS400 to Vietnam has been done at $795/mt CFR and new negotiations are at $780/mt CFR now for long lead times, though no new deals have been reported so far. Customers from Pakistan are very cautious, as they believe prices will keep going down and they do not want to purchase for February.
During the given week, HRC prices in the Chinese domestic market have seen sharp declines amid the decreasing HRC futures prices. At the same time, demand for HRC has remained slack, exerting a negative impact on its prices. It is thought that HRC prices in the Chinese domestic market will likely edge down in the coming week.
Domestic HRC prices in China are at RMB 4,750-4,770/mt ($743-746/mt) ex-warehouse on November 16, with the average price level RMB 205/mt ($32.1/mt) lower as compared to November 9, according to SteelOrbis’ data. Compared with the price level on Monday, November 15, average local quotations are RMB 25/mt ($3.9/mt) higher. This is connected with expected slowdown of production in Hebei due to the worse air quality.
As of November 16, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,371/mt ($683.8/mt), decreasing by RMB 131/mt ($20.5/mt) or 2.9 percent since November 9.
$1 = RMB 6.3924