Ex-China HRC prices mainly stable but with some downward bias amid slow trade during holidays

Although most Chinese suppliers have continued to maintain their offers unchanged over the past week, several mills have decided to correct their offers down slightly this week as business activity has remained slow globally due to the winter holidays. At the same time, HRC futures prices in China have indicated a small rise once again on Tuesday, January 2, while local HRC prices have remained relatively stable over the past week.

At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $580-590/mt FOB mainly for February shipment, with a midpoint at $585/mt FOB, down by $5/mt over the past week. “Most big Chinese mills have continued to offer at the same levels as last week. However, a few have decided to go slightly lower, like in the case of Shagang who is now offering at $590/mt FOB, against $595/mt FOB last week,” a market insider told SteelOrbis.

Meanwhile, the tradable level for ex-China SS400 HRC has been assessed at $565-580/mt FOB, the same as last week, with the lower end of the range corresponding to ex-China offers in Vietnam at around $580-585/mt CFR, while the higher end corresponds to offers in the Middle East and Turkey at $610-618/mt CFR.

In the SAE1006 HRC segment, offers from Chinese suppliers in Vietnam have been voiced at $600/mt CFR for end-of-February shipment, against $600-610/mt CFR last week, though no new deals have been reported so far.

In the meantime, average HRC prices in the Chinese domestic market have remained stable at RMB 4,090-4,350/mt ($576-613/mt) ex-warehouse on January 2, the same as compared to December 26, according to SteelOrbis’ data.

During the given week, demand for HRC in the Chinese domestic market has been slack amid the prevailing cautious sentiments, while inventory levels of HRC have started to rise.  Following the New Year holiday (December 30-January 1), HRC futures prices have seen a rise of 0.88 percent on the first trading day of 2024, while iron ore futures prices have indicated a big increase of 2.93 percent, signaling that raw materials will bolster HRC prices from the cost side. However, according to market insiders, demand for HRC is unlikely to improve in the near future, which will exert a negative impact on prices.

As of January 2, HRC futures at the Shanghai Futures Exchange are standing at RMB 4,146/mt ($586/mt), increasing by RMB 11/mt ($1.6/mt) or up by 0.27 percent since December 26, though increasing by 0.88 percent compared to the previous trading day (December 29).

$1 = RMB 7.077