Following previous sharp rises, ferrous metal futures prices in China have seen a downtrend, exerting a negative impact on market players’ sentiments. Local prices have witnessed some slight decline and interest in imported coils has also declined. At the same time, buyers’ bids for ex-China HRC have been lower than exporters offer prices, resulting in difficulty to achieve deals, especially amid lower prices from other regions.
At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $430-440/mt FOB for late July delivery, edging up by $2.5/mt compared to the end of last week following an uptrend seen in the previous week. But the workable level has been still much lower. For example, a deal for ex-Japan HRC has been heard at $435/mt CFR Vietnam last week, while bids for Indian coils have already slipped to $415/mt CFR after some small volume deals at $435-440/mt CFR registered earlier.
Import market has also been calm recently due to weaker prices in the local market and not very good expectations for the near future. Offers from India have been at $425/mt CFR to China, which has been “no attractive at all,” according to a trader.
“No good news heard to support the development of real estate and infrastructure construction sectors from NPC&CPPCC, weakening the support to market players’ sentiments, while ex-China HRC is still hard to grab the chance in global export market,” an international trader told SteelOrbis.
Domestic HRC prices in China are at RMB 3,530-3,630/mt ($495-509/mt) ex-warehouse on May 26, with the average price level RMB 45/mt ($6.3/mt) lower as compared to May 19, according to SteelOrbis’ data.
HRC futures prices at Shanghai Futures Exchange (SHFE) have seen a downward correction in the given week following continuous rises in the previous period, negatively affecting the HRC market. As of May 26, HRC futures at the Shanghai Future Exchange are standing at RMB 3,407/mt ($478/mt), decreasing by RMB 62/mt ($8.7/mt) or 4.0 percent since May 19.
$1 = RMB 7.1293