Ex-China HRC prices mainly stable despite slight recovery in local and futures prices

Although average HRC prices in the Chinese domestic market have indicated certain rises in the past week amid a slight recovery in HRC futures prices, Chinese HRC exporters have been less positive so far, with big mills keeping their offers for overseas buyers mainly stable, while offers from smaller mills and traders have shown only a slight upward bias since demand remains an issue in the main trade destinations.

Specifically, export offers for boron-added SS400 HRC given by major Chinese mills have settled at $520-530/mt FOB, with a midpoint at $525/mt FOB, the same as last week. At the same time, smaller mills have been offering their materials mainly at $515-520/mt FOB, slightly higher than reported last week at $510-520/mt FOB.   

However, the tradable prices for SS400 HRC have been estimated at $508-515/mt FOB, against $505-515/mt FOB last week. The lower end of the range corresponds to ex-China Q235/SS400 HRC offers to Vietnam at $520-525/mt CFR, up by $2-5/mt week on week. Besides, Chinese SS400 HRC prices for Pakistani buyers have been estimated at $530-535/mt CFR, mainly the same as last week.

Meanwhile, offers for ex-China SS400 HRC to the Middle East have been estimated at $560/mt CFR and slightly above, versus $550-560/mt CFR last week, though, according to sources, buyers’ price ideas have been at $550-555/mt CFR levels. “Interest from UAE buyers has been very limited these days due to the sluggish demand in the region affected by the heat, while other HRC suppliers like India and Japan have simply been out of the market,” a source said.

Furthermore, offers for Chinese Q195 HRC in Turkey have been reported at $550-560/mt CFR, the same as last week. “We heard two big Chinese traders were offering around 30,000 mt to Turkey at $553/mt CFR and $560/mt CFR, respectively, but no deals have been reported so far,” a market insider told SteelOrbis.

In the meantime, during the given week, Jiangsu Province-based Shagang Group, has cut its offer prices for Q235 5.5 mm x 1,500 mm HRC by RMB 150/mt ($21/mt) to RMB 3,950/mt ($555/mt) ex-works for July this year, exerting a negative impact on market sentiments. At the same time, demand for HRC has been slack amid the hot weather and heavy rainfall in many regions of China. However, in the given period, HRC futures prices have indicated some rises, positively affecting prices in the spot market. Besides, import iron ore prices have increased, bolstering HRC prices from the cost side.

Thus, domestic HRC prices in China are at RMB 3,760-3,860/mt ($527-541/mt) ex-warehouse on July 2, with the average price level RMB 17/mt ($2.4/mt) higher compared to that recorded on June 25, according to SteelOrbis’ data.

As of July 2, HRC futures at Shanghai Futures Exchange are standing at RMB 3,757/mt ($527/mt), increasing by RMB 36/mt ($5/mt) or 1.0 percent since June 25, while up 0.19 percent compared to the previous trading day, July 1.

$1 = RMB 7.1291