The delay of a domestic demand recovery and the risk of higher inventories have put pressure on Chinese HRC producers. Some producers in Hebei Province have started to voice very low HRC export offers due to bearish sentiments, though most exporters have maintained the prices they announced earlier this week.
A few offers for SS400 HR strip have been reported from big Chinese mills at $465/mt FOB. Moreover, Vietnamese customers have said that they have received offers for strip (630 mm) and SS400 HRC at $460-465/mt CFR, originating from two mills in Hebei Province. Due to the coronavirus outbreak, demand will be postponed: for instance, in Guangdong Province enterprises are required not to resume trading until March, sources have told SteelOrbis. A pessimistic attitude is affecting mills, as local buyers are expecting lower prices.
Chinese sources have said that just a few mills are aggressive, while not many market participants have already returned to the market. The majority of Chinese producers have been unwilling to reduce prices for SS400 HRC below $490-495/mt FOB.
As a result, the SteelOrbis daily reference price for export HRC from China has come to $480/mt FOB on average, down by $15/mt today, February 6.
