Import offers of hot rolled coil (HRC) in Pakistan have moved down noticeably this week, following the aggressive policy of Chinese suppliers. As a result, the price reversal has made Pakistan’s buyers more cautious as regards concluding new deals.
The ongoing fall in domestic HRC prices has made Chinese sellers more flexible in the export markets and, as a result, much more competitive in the Asian markets, in particular, in Pakistan. Since early this week, average domestic HRC prices in China have lost RMB 50/mt ($7/mt) to RMB 3,900/mt ex-warehouse, according to SteelOrbis. Though most mills are still offering at $520/mt FOB and above for SS400 coils, a number of traders have been ready to sell at as low as $510/mt FOB.
Current ex-China SS400 HRC offers in Pakistan are at $520-525/mt CFR, $10/mt lower than a week ago. At the same time, customers are awaiting further discounts, which seem possible in the near future, taking into account the latest sales to Vietnam. There have been reports in the market that a cargo of ex-China SS400 HRC has been traded at $515/mt CFR to Vietnam, which translates to $500-505/mt FOB.
According to sources, Taiwanese, Japanese and South Korean HRC suppliers have followed the same policy, already decreasing their offers by about $20-25/mt within the week, to $550/mt CFR Karachi.
Meanwhile, Pakistani buyers who have booked sizeable volumes only recently have decided to take a wait-and-see position as of now in order to await future market developments. “Buyers are walking away from negotiations and shall wait for more days,” one market insider said, commenting on the ongoing situation.