HRC futures recovery boosts mood for ex-China HRC exports, spot prices fail to react much

Average HRC prices in the Chinese domestic market have rebounded today, March 25, amid increasing HRC futures prices. Nevertheless, the export market has failed to react strongly so far with only some mills and traders targeting small rises, while in general market sources have remained cautious, not expecting near-term support for fundamentals.

At present, export offers for boron-added SS400 HRC given by major Chinese mills have settled at $470-480/mt FOB, with a midpoint at $475/mt FOB, up by $2.5/mt week on week. At the same time, offers from smaller mills and traders have been voiced at $460-470/mt FOB, mainly the same as last week, as “they have already been offering at a higher level, so no big change,” a market source said.

At the same time, according to sources, offers from a number of traders, mainly from non-VAT traders, have been voiced at $455/mt FOB, up by $5/mt week on week.

Offers for ex-China 2,000 mm Q235 HRC, which is not targeted by the antidumping duty in Vietnam, have been voiced at $480/mt CFR, mainly the same as last week, with several deals reported to have been done at $475/mt CFR at the end of last week. Meanwhile, offers for ex-China Q195 HRC in Pakistan have been voiced at $479/mt CFR, while offers for Q235 HRC have settled at around $480/mt CFR.

Furthermore, ex-China SS400 HRC offers in the Middle East have been voiced at $495-510/mt CFR, up by $5/mt week on week, with a few deals reported to have been signed through traders at $495/mt CFR UAE for end-of-April shipment for around 10,000 mt in total, according to sources. Besides, offers for ex-China Q195 HRC in Turkey have been estimated at around $495/mt CFR from traders, compared to $485-495/mt CFR at the end of last week, while offers from mills have been reported at around $505/mt CFR. 

In the meantime, average HRC prices in the Chinese domestic market have edged up slightly compared to the previous week amid increasing HRC futures prices. In particular, domestic HRC prices in China have settled at RMB 3,460-3,640/mt ($483-508/mt) ex-warehouse on March 25, with the average price level RMB 10/mt ($1.4/mt) higher compared to that recorded on March 18, according to SteelOrbis’ data. 

During the given week, some HRC producers implemented production halts, exerting a positive impact on market sentiments. Inventory of HRC decreased, bolstering prices to a certain degree. However, the demand from downstream users has remained slack, while the uncertainties in the export market have also negatively affected HRC prices. It is expected that HRC prices in the Chinese domestic market will fluctuate within a limited range in the coming week.

As of March 25, HRC futures at Shanghai Futures Exchange are standing at RMB 3,386/mt ($472/mt), increasing by RMB 16/mt ($2.2/mt) or 0.5 percent since March 18, while up 0.18 percent compared to the previous trading day, March 24.

$1 = RMB 7.1788