Ex-China HRC offer prices have moved up sharply again over the past week amid surging HRC futures prices, the positive environment in the local market and the new record highs seen in iron ore prices in China. Even though on December 22 iron ore prices indicated big drops, Chinese steelmakers have raised their ex-China HRC offer prices and expect to keep following an upward trend in the near future.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $710-745/mt FOB for March shipment, moving up by $67.5/mt on average compared to December 15.
The tradable price level and the latest deals for ex-China SS400 HRC have been heard at $685-700/mt FOB, according to sources, up by $52.5/mt on average from last week. Traders are still interested in the export market, though there is still some resistance from buyers in Asia. Tight supply in the international market and in Asia in particular has been supporting Chinese exporters, while other Asian sellers, including those from India, Taiwan and S. Korea, have been focusing on sales in the local markets or to more profitable sales destinations like Europe or the US.
Ex-China SAE1006 HRC has been traded at $700/mt CFR to Vietnam recently and new negotiations are at $710-720/mt CFR, while the previous bookings were at $680-690/mt CFR just late last week, and over the past week prices have surged by $35/mt in deals from China to Vietnam. Chinese traders have been assessing the tradable level at $710/mt FOB at a minimum for SAE1006 HRC, “Surging iron ore prices, upward HRC futures prices and good demand in the local market bolstered players’ sentiments in China's export market,” an international trader told SteelOrbis.
Other suppliers in the region have also continued to increase prices rapidly. Ex-Japan SAE 1006 HRC, used by re-rollers, has been offered at $750/mt CFR Vietnam and sources reported some tonnage sold at this level, though no further details were known by the time of publication. Just last week, 30,000/mt of Japanese coils were sold at $700/mt CFR Vietnam. Offers of ex-India HRC have been heard at $770/mt CFR Vietnam.
During the given week, HRC futures prices in China have moved up sharply, positively affecting its prices in the spot market. However, downstream users have started to be cautious as regards the prospects for the future market. Meanwhile, inventory of HRC has been at relatively low levels, bolstering prices.
Domestic HRC prices in China are at RMB 4,950-5,110/mt ($757-781.5/mt) ex-warehouse on December 22, with the average price level RMB 565/mt ($86.4/mt) higher as compared to December 15, according to SteelOrbis’ data. Compared with the price level on Friday, December 18, local quotations have gained RMB 425/mt ($65/mt).
As of December 22, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,698/mt ($718.5/mt), increasing by RMB 324/mt ($49.6/mt) or 7.4 percent since December 15.
$1 = RMB 6.5387