Domestic prices for HRC in China decreased slightly on Monday August 10 on weaker futures, but market sentiment remained optimistic on supportive economic data.
*** Domestic
Fastmarkets assessed the price for hot-rolled coil in China (Shanghai), at 4,050-4,060 yuan ($581-583) per tonne on August 10, narrowing downward by 10 yuan per tonne from last Friday.
The lower HRC futures pushed spot prices downward slightly over trading on Monday, but market participants expected that prices would soon rebound because end-user demand was strong.
China’s Producer Price Index (PPI) for July increased by 0.4% from June, which showed that the industry was recovering gradually from the effects of the Covid-19 pandemic, an industry analyst at the country’s National Bureau of Statistics said.
And this industrial growth will require more materials, including HRC, sources said.
*** Export
Fastmarkets’ steel HRC index, export, fob main port China, was $505.79 per tonne on Monday, up by $1.55 per tonne from $504.79 per tonne on Friday of last week.
Steel mills were offering HRC at $515 per tonne fob, up by $10 per tonne from early last week.
Market participants expected that steel mills would not take orders at prices lower than $505 per tonne fob because domestic demand was strong and profit was good.
Foreign buyers accepted prices of $500-505 per tonne fob, so deals should be concluded soon, market sources said.
*** Market chatter
“Steel mills are optimistic on HRC demand and prices in the coming couple of months, so they raised their list prices,” a Shanghai-based trader said.
Baowu Steel, for example, raised its base price for HRC by 200 yuan per tonne for orders booked in September, compared with its August price.
*** Shanghai Futures Exchange
The most-traded October HRC futures contract on the SHFE closed at 3,894 yuan per tonne on Monday, down by 10 yuan per tonne from last Friday.
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