Ex-China HRC prices down $15-20/mt amid sharp falls in local and futures prices

This week has brought a significant fall in export offers both from Chinese HRC mills and traders as HRC prices in the Chinese domestic market have indicated big declines following the slump in HRC futures prices. At the same time, despite the decrease in prices, trade has remained limited amid generally slow demand globally.

At present, export offers for boron-added SS400 HRC given by major Chinese mills have come to $500-505/mt FOB, with a midpoint at $502.5/mt FOB, down by $15/mt over the past week. “Some offers from big mills like Benxi Steel are still officially reported at $520/mt FOB, but this level is not workable anymore,” a market insider said. Meanwhile offers from smaller mills have been reported at $495-500/mt FOB, versus $510-515/mt FOB at the beginning of last week.

At the same time, the tradable prices for SS400 HRC have been estimated at $487-500/mt FOB, down by $15-20/mt since the beginning of last week. The lower end of the range corresponds to ex-China SS400/Q235 HRC offers in Vietnam heard at $500-505/mt CFR, versus $520/mt CFR last week. Besides, offers for Chinese SS400 HRC in Pakistan have been estimated at around $515-525/mt CFR, depending on the supplier.

In the meantime, offers for ex-China SS400 HRC in the Middle East have been reported at $535-540/mt CFR for September shipment, against $560/mt CFR at the beginning of last week and versus $540-545/mt CFR at the end of last week. According to sources, several deals have already been signed at $535-540/mt CFR UAE this week, while bids have been voiced at as low as $530/mt CFR.

Offers for ex-China Q195 HRC in Turkey have decreased by $15/mt week on week, coming to $535-540/mt CFR for September shipment.

Meanwhile, domestic HRC prices in China have settled at RMB 3,660-3,720/mt ($513-522/mt) ex-warehouse on July 23, with the average price level RMB 90/mt ($12/mt) lower compared to that recorded on July 16, according to SteelOrbis’ data.

During the given week, HRC futures prices have moved down, exerting a negative impact on HRC prices in the spot market. Traders with relatively high inventory levels of HRC have chosen to sell at lower prices, while sluggish demand from downstream users has made it difficult to digest inventories, negatively affecting market sentiments and weakening the support for prices. It is expected that HRC prices in the Chinese domestic market will continue their downtrend in the coming week.

As of July 23, HRC futures at Shanghai Futures Exchange are standing at RMB 3,583/mt ($503/mt), decreasing by RMB 148/mt ($21/mt) or 4.0 percent since July 16, while down 1.75 percent compared to the previous trading day, July 22.

$1 = RMB 7.1334