Ex-China HRC offer prices have edged down slightly in the past week amid the decreasing trend in the local spot market in China. Even though some mills have been attempting to push offers up in the export market recently, the tradable price level for ex-China HRC has not improved and is still under pressure, while the future trend is still unclear with the local HRC market having opened at a lower level today after the holiday.
At present, the workable export price level for boron-added SS400 HRC given by major Chinese mills is at $940-960/mt FOB for August shipment, with a midpoint at $950/mt FOB, moving down by $5/mt on average compared to June 8. “Rumours of the adjustment of the export tax led to increasing uncertainties in the export market, resulting in a wait-and-see stance among overseas buyers. HRC prices [in the domestic market] may fluctuate within a limited range amid the traditional offseason during the hot summer,” an international trader told SteelOrbis.
One Chinese large mill has increased its offer for SS400 HRC to $975/mt FOB, up by about $10/mt since last week. Another producer has been officially offering at $1,000/mt FOB, but the
price is negotiable.
Nevertheless, the tradable price level for SS400 coils has been at $890-905/mt FOB lately, down from the level of $895-910/mt FOB last week.
The situation has been similar in the SAE1006 HRC segment. The workable price for position cargoes of ex-China SAE1006 HRC has been at $900-920/mt FOB, versus $905-920/mt FOB early last week.
During the given week, local HRC prices have seen overall rises amid rebounding HRC futures prices. However, on Tuesday, June 15, the market opened at a lower level after the holiday on Monday.
Bullish sentiments have prevailed among market players over the past week, but futures have been fluctuating recently, so the outlook is unclear for the near future. Downstream users have been quite cautious due to the rainy season in eastern China, and so most of them have purchased in line with their needs. Inventory of HRC has risen slightly. It is thought that HRC prices in the Chinese domestic market may fluctuate within a limited range in the coming week.
Domestic HRC prices in China are at RMB 5,510-5,560/mt ($861-869/mt) ex-warehouse on June 15, with the average price level RMB 100/mt ($15.6/mt) higher as compared to June 8, according to SteelOrbis’ data. Compared with the price level last Friday, June 11, average local quotations are RMB 25/mt ($4/mt) lower.
As of June 15, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,436/mt ($849.4/mt), increasing by RMB 148/mt ($23.1/mt) or 2.8 percent since June 8, though compared to the previous trading day on Friday they posted a drop by RMB 106/mt ($16.5/mt) or 1.9 percent.
$1 = RMB 6.407