Most Chinese HRC mills keep prices stable, optimistic mood both overseas and domestically wavers

This week, most big Chinese mills have rolled over their export prices, with only small corrections reported. In particular, offers, reported from several producers at $590/mt FOB, have been estimated as “meaningless” this week, given no visible support from demand side globally. At the same time, the market trend has lacked clarity so far, while domestic HRC prices in China have been indicating ups and downs amid fluctuations of futures prices.

At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $555-570/mt FOB, with a midpoint at $562.5/mt FOB, which means that the price has lost $12.5/mt week on week, however, in fact, workable prices have remained unchanged, as no offers at $590/mt FOB have been accepted by any customer. “Benxi Steel is still officially offering at $590/mt FOB, but you need to see their deal price, its actually around $555/mt FOB,” a market insider said.

Meanwhile, the tradable level for Chinese SS400 HRC has remained unchanged over the past week, standing at $540-550/mt FOB, though several traders have reported their offers in Vietnam at $545/mt CFR, which means around $535/mt FOB. In the meantime, offers for ex-China SS400 in Pakistan have been voiced at $565-570/mt CFR, up by $10-15/mt over the past two weeks. Meanwhile, most offers for ex-China HRC in Turkey have been reported at $590/mt CFR for July and August shipments, same as last week, while ex-China offers in the Middle East have remained at $595-600/mt CFR, while some offers have been heard at above $600/mt CFR from several big Chinese mills.

The movement of tradable SAE1006 HRC prices has been varying according to the destination, with offers to Vietnam falling by $20/mt week on week to $565-570/mt CFR, given no support from buyers amid weak demand, while ex-China SAE1006 HRC offers in Pakistan have been heard at around $585-590/mt CFR versus $570-575/mt CFR last week.

In the meantime, during the given period, Chinese major steelmakers, including Baosteel, Ansteel and Bensteel issued their HRC prices for delivery in July, holding their prices stable, affecting prices in spot market. Meanwhile, the demand for HRC has not seen significant improvement yet, while there will be high temperature in northern China and heavy rains in southern China in the coming period, which will exert a negative impact on HRC market.

Domestic HRC prices in China are at RMB 3,800-3,970/mt ($531.5-555/mt) ex-warehouse on June 13, with the average price level RMB 10/mt ($13.1/mt) lower compared to that recorded on June 6, according to SteelOrbis’ data.

As of June 13, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,848/mt ($538/mt), increasing by RMB 83/mt ($11.6/mt) or 2.2 percent since June 6.

$1 = RMB 7.1498