China HRC prices rose on Monday August 31, which led a major mill in northern China to raise its export offer by $10 per tonne.
*** Domestic
Eastern China (Shanghai): 4,040-4,050 yuan ($589-590) yuan per tonne, up 30-50 yuan per tonne
Sellers in Shanghai raised their prices amid surging futures, although several sources in the city said trading activity was merely moderate in the spot market.
A Shanghai-based trader said HRC futures had risen in response to news of steel output cuts in China’s steelmaking hub of Tangshan in the north, helped lifted market sentiment.
*** local authorities in the city would order several steel mills to limit their production
A steel consultancy reported last week that local authorities in the city would order several steel mills to limit their production to curb air pollution.
But a second Shanghai-based trader warned that HRC prices remained under pressure, because many HRC cargoes from the north were arriving in eastern China. Traders in eastern China had booked cargoes from the northern region in recent weeks to leverage on the latter’s lower prices.
As such, HRC inventory levels in Shanghai will rise and possibly result in price decreases, he said.
*** Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $513.50 per tonne, up $4.67 per tonne
A major mill in northern China was heard to have issued an offer of $535 per tonne fob for its HRC this week, up by $10 per tonne from last week’s $525 per tonne fob.
This followed the gains in the domestic market during the day.
Most market participants expect other major mills to also raise their export offers on Tuesday.
*** overseas buyers would have to accept higher prices for CHINA HRC
A Zhejiang-based trader said overseas buyers would have to accept higher prices if most Chinese mills raised their offers.
He believes buyers in Vietnam were willing to pay around $525 per tonne cfr for rerolling-grade HRC following bookings of Indian HRC made at around $520 per tonne cfr Vietnam last week. The former is equivalent to around $515 per tonne fob China.
Market chatter
“I heard a buyer in Vietnam had booked some Indian HRC at $525 per tonne cfr Vietnam last Friday, but I could not confirm it, especially since Chinese HRC prices were weakening last week. But after today’s big gains in China, I think $525 per tonne cfr Vietnam is possible this week,” a third Shanghai-based trader said.
*** Shanghai Futures Exchange
The most-traded October HRC futures contract closed at 4,011 yuan per tonne on Monday, up by 46 yuan per tonne from last Friday.
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