Posted on 26 Aug 2024
China's hot-rolled coil fluctuated upward last week, benefiting from the improvement in overall sentiment. However, the tradable price in export markets did not increase significantly, and even fell slightly in some of markets, Kallanish notes.
In Shanghai on Friday afternoon, 5.5x1,500mm Q235B HRC was traded at around CNY 3,180-3,200/tonne ($446-448/t), up CNY 30/t on-week. On the Shanghai Futures Exchange, the most-traded October 2024 contract for HRC lost CNY 28/t from Thursday but gained CNY 58/t on-week to CNY 3,219/t.
In Wuxi on Friday afternoon, 20x2,000mm Q235B plate prices were assessed at around CNY 3,250-3,270/t, unchanged from the prior assessment.
The slight increase in steel market demand and the decline in HRC inventory have effectively driven the recovery of domestic HRC prices from a four-year low. However, due to high production and weak manufacturing industries, market concerns have not improved significantly.
Domestic growth has indeed driven up most export prices. To Turkey, base HRC offers rebounded to over $500/t cfr, while SAE 1006 HRC was offered $15-20/t higher for October shipment.
However, buyers paused their purchases, causing the tradable level in some areas to stabilise and even drop slightly. In Vietnam, some Chinese mills received bids at $460/t cfr for 3-12mm Q235 HRC, which was the deal level seen the prior Friday. Due to domestic increases, “I guess Chinese sellers now could only accept $465/t cfr Vietnam,” an exporter estimated on Friday.
“Offers are too crazy. $465-470/t cfr without many bids. Customers still feel cautious,” a Hanoi trader says. “These are for October shipment because customers don’t want to buy far shipment now.”
Offers for rerolling SAE 1006 HRC fell further by around $5/t on-week to $478/t cfr Vietnam, and about $10/t higher for South Korean markets. But sales for this product are still not good. “Buyers may still expect [HRC] prices to fall again,” one Chinese trader comments.
Kallanish assessed SAE grade 2-2.7mm thickness HRC at $475-480/t cfr Vietnam and 2mm SAE 1006 HRC at $475-480/t fob China on 23 August, both down $5/t on-week.
Another exacerbating problem is the recent increase in reneging of export orders. Continuous price cuts have made buyers regret their previous high-priced orders. Some Chinese exporters said this trend has already spread from HRC to billet.
Source:Kallanish
