Stable ex-China HRC prices reflect weak trade, mounting freight pressure

Ex-China hot rolled coil (HRC) export prices have remained largely stable from mills over the past week, with offers from major mills hovering within a relatively narrow range despite ongoing volatility in freight rates and geopolitical uncertainties. While some upward pressure has been observed in certain destinations due to rising freight costs linked to the escalation of the war in the Middle East, overall trading activity has been limited, with mills maintaining firm offer levels and continuing to refrain from issuing quotations to some regions, particularly the Gulf, amid unclear shipping and insurance conditions.

More specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $480-490/mt FOB, with a midpoint at $485/mt FOB, the same as last week. Besides, offers from smaller private mills have been voiced at around $480/mt CFR, compared to $475-480/mt FOB last week. 

“Hebei Zongheng offers at $481/mt FOB, while Angang and Benxi offer at $490/mt FOB for small orders, with deal prices reported at $487/mt FOB in Latin America and Southeast Asia,” a Chinese trader told SteelOrbis.

Offers from Chinese traders have been estimated at $480-490/mt FOB, versus $475-490/mt FOB last week. Ex-China 2,000 mm Q235 HRC offers in Vietnam are still rare due to the absence of non-VAT offers, with indicative offers with VAT for April shipment voiced at $500-505/mt CFR, mainly the same as last week. Furthermore, offers for ex-China Q195 HRC in Pakistan have been estimated at $505/mt CFR for April shipment, up by $10/mt week on week.

Furthermore, Chinese Q195 HRC offers through traders to Turkey have been estimated at $535-545/mt CFR, mainly the same as last week, which translates to around $480-490/mt FOB, given that the freight rates have increased significantly this week due to the escalation of the war in the Middle East. In particular, freight for steel products in large lots of 50,000 mt from China to Turkey is estimated at $55/mt, which is up from $35-37/mt rates before the war.

In the meantime, most Chinese mills are still not issuing new export offers to Gulf buyers as freight conditions and insurance coverage for vessels transiting the Strait of Hormuz remain unclear.

In the meantime, HRC prices in the Chinese domestic market have moved up compared to the previous week amid the improved demand and bullish sentiments among market players. In particular, domestic HRC prices in China have settled at RMB 3,340-3,400/mt ($484-493/mt) ex-warehouse on March 17, with the average price level RMB 30/mt ($4.3/mt) higher compared to March 10, according to SteelOrbis’ data.

During the given week, HRC futures prices have continued their uptrend, exerting a positive impact on market sentiments. However, on March 10 this year, overall domestic inventory of HRC in 21 major cities in China increased by 2.5 percent compared to February 28, with the growth slowing down sharply compared to 8.2 percent recorded on February 28, signalling improved demand from downstream users. Following the Two Sessions, Chinese steelmakers’ HRC outputs increased, while the improved demand has bolstered market sentiments to a certain extent. Meanwhile, China will implement production reductions in 2026, which will limit the increase in HRC output. Market players are more optimistic as regards the future prospects for the HRC market. It is expected that HRC prices in the Chinese domestic market will rebound in the coming week, though the speed of inventory destocking and changes in export orders during mid-to-late March will affect the HRC market.

As of March 17, HRC futures at Shanghai Futures Exchange are standing at RMB 3,313/mt ($480/mt), increasing by RMB 57/mt ($8.3/mt) or 1.75 percent since March 10, while increasing by 0.58 percent compared to the previous trading day, March 16.

“China’s domestic steel market remains relatively firm, supported by tight power supply conditions that have provided some cost-side support. Local prices are gradually trending upward, with supply and demand largely balanced, suggesting that the seasonal spring restocking cycle may not be far off. Meanwhile, the export market has seen little change in recent days. Although freight rates have become somewhat more reasonable, overall conditions remain challenging for exporters,” a market insider told SteelOrbis.

$1 = RMB 6.8961