Ex-China HRC offer prices have edged up slightly after major Chinese steelmaker Baosteel raised its domestic prices for September. At the same time, demand in the local market in China has not increased and more customers have been taking wait-and-see positions, especially in negotiations with foreign suppliers.
Export prices up, competition still tough
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $505-520/mt FOB for late October shipment, moving up by $2.5/mt on average compared to last week, following a sharp rise in the previous week.
Though there has been information about a sale of ex-China HRC at $500/mt CFR Vietnam last week, this was a position cargo and no Chinese mill was ready to give such a low level.
Other major exporters of HRC in Asia have also increased prices sharply. Offer prices of ex-India HRC have been heard at $500-515/mt CFR Vietnam, remaining still among the most competitive. Over the past week, one deal for Indian SAE1006 HRC has been done at $495/mt CFR and another contract for 30,000 mt has been concluded at $500-505/mt CFR Vietnam. Offers from Japan have been heard at $550/mt CFR.
“Quick rises in HRC offer prices in the export market have caused buyers to mostly hold a wait-and-see stance towards purchases of HRC, while bullish sentiments have prevailed among market players in the local Chinese market,” an international trader has told SteelOrbis.
Domestic demand and prices not very strong
During the given week, demand for HRC in China has not seen significant improvement. Meanwhile, inventory of HRC has risen, which will result in a cautious mood in the near future. However, major Chinese steelmaker Baosteel raised its ex-works prices for HRC by RMB 200/mt ($28/mt) on August 10, exerting a positive impact on the HRC market.
Domestic HRC prices in China are at RMB 3,910-4,060/mt ($561-583/mt) ex-warehouse on August 11, with the average price level RMB 5/mt ($0.7/mt) higher as compared to August 4, according to SteelOrbis’ data.
As of August 11, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,872/mt ($555.5/mt), decreasing by RMB 48/mt ($6.9/mt) or 1.2 percent since August 4.
Bids for imported HRC in China lower than in Vietnam
Chinese customers have not been active in purchases of imported coils over the past week due to sharp increases in offers from India and not so strong local prices. Offers from India have been starting at $500/mt CFR and up to $520/mt CFR, but “this level is not workable here. China has stopped buying due to very high prices,” a Chinese trader said. Most customers have been bidding at $485-490/mt CFR China. A sale at $500/mt CFR has been rumored in the market, but it has not been confirmed by the time of publication. A number of sources in China confirmed that bids are lower than in Vietnam.
$1 = RMB 6.9711