Following a significant drop in ex-China HRC quotations last week, this week has brought another even more dramatic fall in prices. In addition, market insiders have fears that the trend will continue for a good while as Chinese traders have started to offer and sell HRC position cargoes in the export market at much lower prices. In particular, offers for SS400 HRC from some Chinese mills in Vietnam have dropped to $695-700/mt CFR, compared to $730-740/mt at the beginning of last week, while offers from Chinese traders have tumbled to $660-675/mt CFR, down by $25-40/mt since Friday, June 17. Meanwhile, some Vietnamese customers have already voiced their bids for ex-China SS400 at $650/mt CFR. Besides, offers for ex-China SAE1006 HRC have settled at around $705-715/mt CFR Vietnam, down by $10-15/mt CFR over the weekend.
This decrease is explained by the significant drop in ex-China HRC futures prices, which lost around RMB 233/mt ($35/mt) over the weekend, falling to RMB 4,220/mt ($631/mt) for delivery in October.
Furthermore, domestic HRC prices in China have followed this decline, coming to RMB 4,465/mt ($668/mt) ex-warehouse on average, down by RMB 225/mt ($34/mt) on June 20, according to SteelOrbis’ data. “We believe that steel prices are likely to drop in two or three more steps, before settling,” a Vietnamese trader told SteelOrbis.
