Ex-China HRC offer prices have edged down slightly in the past week ended on June 8, following the rises in the previous week, amid the decreasing trend in ferrous metal futures and in the local spot market in China.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $940-970/mt FOB for July shipment, with a midpoint at $955/mt FOB, moving down by $10/mt on average compared to June 1. “HRC prices in the Chinese domestic market have indicated decreases, exerting a negative impact on export offers,” an international trader told SteelOrbis.
The tradable price level for SS400 coils has come to $895-910/mt FOB lately, down from $900-915/mt FOB last week. Trading activity has been limited as the gap between offers and the workable price levels has been high and buyers have been cautious in concluding deals amid revived rumours of the possible HRC export duty introduction in the short term. According to market sources, the government is planning to impose an export duty of 11 percent for HRC and 10 percent for PPGI, as well as cancel the export tax rebate for CRC and HDG from June 15. However, so far no official announcement has been seen and the market is expecting it early next week.
The workable price levels for SAE1006 HRC from Chinese small mills and traders have been reported at not above $920/mt FOB. “The market is a bit uncertain these days with China’s sudden drop in the domestic market,” a source from Southeast Asia said.
During the given week, local HRC prices in China have declined slightly amid the decreasing HRC futures prices and prevailing bearish sentiments, while demand has been slack. Inventory of HRC has risen slightly, with most market players choosing to sell at lower prices to stimulate sales activities and lower inventory. It is thought that HRC prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.
Domestic HRC prices in China are at RMB 5,390-5,480/mt ($843.5-857.6/mt) ex-warehouse on June 8, with the average price level RMB 55/mt ($8.6/mt) lower as compared to June 1, according to SteelOrbis’ data. Compared with the price level on Monday, June 7, average local quotations are RMB 50/mt ($7.8/mt) lower.
As of June 8, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,288/mt ($827.5/mt), decreasing by RMB 149/mt ($23.3/mt) or 2.74 percent since June 1.
$1 = RMB 6.3909
