Sentiment in the Chinese HRC market has improved, which has been reflected in futures price increases, pushing up local prices further. As a result, some further hike in import prices has been accepted in China. Chinese HRC export prices have gained support from the strong trend in the local market and moved up sharply, though buyers have been showing resistance to the high offer prices.
A deal for ex-India HRC has been signed at $428/mt CFR recently, sources have said, up $8/mt compared to deals late last week and $18/mt above transaction prices for Indian origin coils early last week. In addition to deals for Indian origin HRC to China last week, about 40,000 mt of coils from one Turkish mill was sold at $420/mt CFR last week, SteelOrbis has learned.
Offers for Indian HRC to Chinese customers have already increased up to $440/mt CFR. But Chinese traders have said that the workable level is still below $430/mt CFR and customers are generally not ready to accept even $435/mt CFR, saying that this price increase is too rapid.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $450-460/mt FOB for late July and early August shipment, edging up by $20/mt compared to last week. The reference deal prices for Chinese origin HRC have been heard at $435-440/mt FOB, but no fresh bookings have been reported by the time of publication. “Rising ex-China HRC offer prices made it hard to receive orders in the export market,” an international trader told SteelOrbis.
During the given week, demand from downstream users in China has improved, exerting a positive impact on HRC prices in the spot market. Meanwhile, demand has been recovering in overseas markets amid the improved situation as regards the coronavirus. Moreover, HRC futures prices at Shanghai Futures Exchange (SHFE) have moved on a rising trend, pushing up HRC prices.
Domestic HRC prices in China are at RMB 3,650-3,690/mt ($513-518/mt) ex-warehouse on June 2, with the average price level RMB 90/mt ($12.6/mt) higher as compared to May 26, according to SteelOrbis’ data.
As of June 2, HRC futures at the Shanghai Future Exchange are standing at RMB 3,575/mt ($502/mt), increasing by RMB 168/mt ($23.6/mt) or 4.9 percent since May 26.
$1 = RMB 7.1167
