Export offers for Chinese HRC both from traders and mills have increased significantly on Monday, September 30, the last working day before the long holiday (October 1-7) amid sharp rises in local and futures HRC prices following the announcement of stimulus measures in China. At the same time, the outlook for ex-China HRC is rather mixed for the post-holiday period as, on the one hand, most market insiders still believe demand in the main trade destinations will not be able to support a further uptrend and that prices will be adjusted down right before or after the end of the holiday. On the other hand, a number of Chinese suppliers expect the stimulus measures to keep prices high and even to push them up slightly.
More specifically, offers for boron-added SS400 HRC from big Chinese mills have been estimated at $520-540/mt FOB for November shipment, with a midpoint at $530/mt FOB, or up by $57.5/mt since the end of last week. “We heard Shagang’s export prices at $530/mt FOB, but most mills have refrained from giving official offers,” a market insider told SteelOrbis.
Meanwhile, tradable prices for ex-China SS400 and Q235 HRC have been estimated at $520-530/mt FOB, compared to $470-475/mt FOB. In particular, offers for ex-China Q235 HRC have been voiced at $540-545/mt CFR, against $490-495/mt CFR at the end of last week, while offers for ex-China Q195 have been heard at $535/mt CFR, up by $50/mt week on week.
Furthermore, according to market insiders, offers for ex-China Q195 HRC have increased to $560-580/mt CFR Turkey, versus $510-520/mt CFR at the end of last week.
“For now, new prices don’t have any sense as tomorrow the market will close for the holiday until next Monday and no buyer wants to believe that such high prices will be sustained after the holiday,” a Vietnamese trader told SteelOrbis, adding, “This week, local Vietnamese producer Hoa Phat should announce new offers for domestic customers which will also direct the trend.”
In the domestic market, local HRC prices in China have settled at RMB 3,660-3,750/mt ($522-535/mt) ex-warehouse on September 24, with the average price level RMB 505/mt ($72/mt) higher compared to that recorded on September 23, according to SteelOrbis’ data.
As of September 30, HRC futures at Shanghai Futures Exchange are standing at RMB 3,643/mt ($520.4/mt), increasing by RMB 476/mt ($68/mt) or 15 percent since September 23, while up 6.99 percent compared to the previous trading day, September 27.
$1 = RMB 7.0074