Prices in the local Chinese HRC market have dropped much over the past two working days. Subsequently, some traders have started to offer and sell HRC in the export market at much lower prices. Mills have been less flexible so far, but a bearish outlook has prevailed in the market in general, SteelOrbis has learned from market sources.
Position cargoes for SAE1006 HRC from China have been offered at $1,020-1,030/mt CFR Vietnam early this week, while late last week a deal also from a trader was done at $1,040/mt CFR. “Demand is weak. Prices from China may go down more,” a local trader said. Before these position cargoes emerged in the market, most official offers from China for SAE were not below $1,070/mt CFR.
Last week, most customers from Vietnam were focused on local purchases of HRC from Formosa at $1,030-1,035/mt CFR. Apart from this, some needed volumes for HRC from India were purchased in Vietnam last week - 10,000 was sold at $1,060/mt CFR and 30,000 mt were traded at $1,070/mt CFR later in the week. But since Thursday negotiations have halted as buyers saw the drop in the Chinese market and were waiting for further developments.
The SteelOrbis reference price for import HRC in Vietnam has been lowered by $20/mt from $1,050-1,060/mt CFR late last week to $1,030-1,040/mt CFR.
Official offers from large Chinese mills for boron-added SS400 have not fallen sharply so far, being at $1,040-1,080/mt FOB, with only the upper end of the range decreasing from $1,100/mt FOB last week. At the same time, the tradable level for SS400 has already come to $1,000-1,020/mt FOB.
The average local HRC price in China has dropped by RMB 330/mt ($51/mt) from Friday to RMB 6,045/mt ($940/mt) ex-warehouse, according to SteelOrbis’ data. This happened after a fall by RMB 270/mt ($42/mt) on Friday in comparison to Thursday. This drop of over $90/mt in total in the Chinese market has hit sentiment hard in the Asian HRC market. “If these prices are sustained, Chinese exporters may offer very good prices [in the export market],” a source from Southeast Asia said.