Reports of an expected tax rebate cut for China’s HRC exports from 13 percent to 9 percent have been actively spreading in the market this week, and on Thursday, March 18, a number of market sources confirmed that the change is expected to be implemented effective from April 1. No official announcement has been made yet, but one is expected in the coming days, SteelOrbis has learned.
As a result, many Chinese HRC exporters have withdrawn their offers from the market, waiting for the announcement by the Chinese authorities. The reports of an imminent tax rebate cut have also pushed local HRC prices up further. The average HRC price in China has added RMB 15/mt ($2.3/mt) today to RMB 4,950/mt ($736/mt) ex-warehouse, according to SteelOrbis’ information.
The official offer price range for ex-China boron-added SS400 HRC is still at $735-765/mt FOB, but very few offers from mills closer to the higher end of the range are still in the market by the end of the week.
Due to a lack of offers from China, most Vietnamese customers have been in negotiations for purchases of Indian or domestic coils. According to sources, after a contract at $760/mt CFR for 30,000 mt, an Indian exporter has sold a smaller volume of SAE1006 HRC at $765-770/mt CFR. And now “$780/mt CFR is possible to achieve,” an Indian producer confirmed to SteelOrbis. Vietnamese traders said that the large customers have been booking rerolling HRC from Formosa at $765-770/mt CFR, but bids at higher levels are limited for now, though sentiment has become “definitely bullish,” one source commented.
The SteelOrbis reference price for import SAE1006 HRC in Vietnam has been increased by $10-15/mt compared to last week to $765-770/mt CFR.
$1 = RMB 6.4859