Local Chinese HRC spot prices up, but Asia’s import market still far from positive

Wednesday, 01 December 2021 17:40:08 (GMT+3)   |   Shanghai
       

Local HRC spot prices in China have posted a rise today, December 1, supported by an increase in futures prices and firm buying. But in the import HRC market in Asia there has been no improvement so far as most customers have been facing limited finished steel demand and still hold a bearish outlook.

Average local HRC prices in China have increased by RMB 40/mt ($6/mt) to RMB 4,810/mt ($755/mt) ex-warehouse, according to SteelOrbis’ information, which is also RNMB 20/mt ($3/mt) higher week on week. This increase has been driven by still limited production and some increase in buying, sources have said. Moreover, as of December 1, HRC futures at the Shanghai Futures Exchange have reached RMB 4,720/mt ($741/mt), increasing by RMB 121/mt ($19/mt) since November 24 and RMB 153/mt ($24/mt) on the day.

Nevertheless, the outlook for December is still unclear as demand is expected to be reduced due to seasonal factors and the government curbing measures for re-rolling in some provinces. Today, Shagang Group announced its local HRC prices for December, cutting them by RMB 1,000/mt ($157/mt).

In Asia’s import market, there has not been any visible improvement. The latest offers for ex-Japan HRC to Vietnam have been heard at $850/mt CFR, down by at least $40/mt CFR from the previous level in the middle of November, while the tradable level for at least one mill has been at $840/mt CFR Vietnam. Also, customers from Pakistan have been receiving ex-South Korea HRC offers at $850-860/mt CFR, with no takers.

Indian mills have generally been asking for $850-860/mt CFR in Vietnam, but one seller sold a cargo at $835/mt CFR, as was reported earlier, and, even though mills mostly said this price is too low, a number of traders said that the information is correct.

For ex-China SAE1006, traders’ latest deal was at $825/mt CFR in Vietnam and the tradable prices have not changed since then. The number of offers from short-selling traders has decreased, but most mills have reported that an increase in export prices will hardly be fixed in deals in Vietnam or neighboring markets due to very limited demand. 

$1 = RMB 6.3693


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