Mood among Chinese HRC exporters worsens again after slight rebound last week

Following a slight rebound in ex-China HRC prices amid higher HRC futures prices at the beginning of last week, this week with worse sentiments appearing again in the HRC futures market, the tradable level for HRC has lost at least $20/mt since last week in new offers from Chinese traders globally, while offers from Chinese mills have declined by $10/mt over the past week.

More specifically, export offers for boron-added SS400 from most big mills `re estimated at $485-495/mt FOB, with a midpoint at $490/mt FOB, down by $10/mt over the past week, while offers from smaller mills have dropped by $10-20/mt to $470-480/mt FOB level.

Meanwhile, the tradable price level for ex-China SS400 and Q195 HRC has been estimated at $465-480/mt FOB, against $485-500/mt FOB at the beginning of last week. Specifically, ex-China SS400 HRC offers in Vietnam have been voiced at $485/mt CFR, with several deals reported at this level as of Tuesday, August 13, down by $15/mt since the beginning of last week. Besides, according to sources, a few deals were signed at $477/mt CFR yesterday, down by $3/mt as compared to deal prices at the end of last week.

Furthermore, ex-China SS400 HRC offers in the Middle East have dropped to $520/mt CFR, against $530-540/mt CFR reported last week, while offers for ex-China Q195 HRC have been voiced at $513-519/mt CFR Turkey, depending on the quantity, versus $530-535/mt CFR at the beginning of last week.

In the meantime, average HRC prices in the Chinese domestic market have seen significant decreases amid the sluggish demand from downstream users and declining HRC futures prices. In particular, domestic HRC prices in China have settled at RMB 3,330-3,430/mt ($466-480/mt) ex-warehouse on August 13, with the average price level RMB 160/mt ($22.4/mt) lower compared to that recorded on August 6, according to SteelOrbis’ data.

During the given week, demand for HRC has continued to be sluggish. Inventory of HRC has been at high levels, while bearish sentiments have prevailed among market players. HRC producers’ losses have increased, while the contradiction between supply and demand has not improved, exerting a negative impact on the market. At the same time, HRC futures prices have continued their downtrend, also weakening the support for the spot market. It is thought that HRC prices in the Chinese domestic market will edge down in the coming week.

As of August 13, HRC futures at Shanghai Futures Exchange are standing at RMB 3,335/mt ($467/mt), decreasing by RMB 152/mt ($21/mt) or 4.4 percent since August 6, while down 1.62 percent compared to the previous trading day, August 12.

$1 = RMB 7.1479