Ex-China HRC offer prices have moved down following previous sharp rises amid the corrections seen in ferrous metal futures prices and local prices in China. While traders have already started sales of position cargoes at much lower prices, most major mills have been avoiding sharp falls in their prices for now.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $1,030-1,070/mt FOB for July shipment, with a midpoint at $1,050/mt FOB, moving down by $10/mt on average compared to May 11.
At the same time, some rare offers for SS400 have already been reported at $995-1,010/mt FOB from smaller mills and traders. “Buyers mostly hold a wait-and-see stance in concluding purchases of ex-China HRC as the bullish sentiments among market players seemed to have shifted amid the deep downward corrections in ferrous metal futures prices,” an international trader told SteelOrbis.
Official offers from large mills from China for SAE1006 HRC to Vietnam are still not below $1,070/mt CFR. But traders have been selling position cargoes at much lower levels. For instance, late last week a contract was done at $1,040/mt CFR. Offers have declined to $1,020-1,030/mt CFR early this week, with a contact already reported at $1,010-1,015/mt CFR. This level has not been included in the reference price for now.
During the given week, HRC prices in the Chinese domestic market have seen sharp declines amid the big decreases in ferrous metal futures prices. Meanwhile, downstream buyers have been unwilling to conclude purchases for HRC, resulting in prevailing cautious sentiments in the market. The price trend is going to become clearer this week.
Domestic HRC prices in China are at RMB 6,070- 6,150/mt ($943-956/mt) ex-warehouse on May 18, with the average price level RMB 385/mt ($60/mt) lower as compared to May 11, according to SteelOrbis’ data. Nevertheless, after the two days of sharp falls, today the price has rebounded compared to Monday, May 17, as supply is going to decline a bit, following short-term restrictions for production in Tangshan from Friday. Average local quotations are RMB 65/mt ($10/mt) higher now than a day earlier.
As of May 18, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,980/mt ($929/mt), decreasing by RMB 560/mt ($87/mt) or 8.6 percent since May 11.
$1 = RMB 6.4357