Trading activity picked up in China hrc market on Friday September 11 in response to rising futures, though prices weakened from a day earlier.
*** Domestic
Eastern China (Shanghai): 3,890-3,920 yuan ($569-574) yuan per tonne, down 30 yuan per tonne
Northern China (Tangshan) – weekly assessment: 3,880-3,900 yuan per tonne, down 10-20 yuan per tonne
Sellers in Shanghai issued offers at 3,890-3,910 yuan per tonne in the morning before raising these to 3,900-3,920 yuan per tonne in the afternoon in response to the increased demand in the spot market.
A Shanghai-based trader said buyers had returned to the spot market to restock on seeing the gains in the futures market. HRC futures had logged decreases in the last five trading days.
HRC prices in eastern China ended the week 120-130 yuan per tonne lower.
Sources attributed the decreased partly to the consecutive days of losses for HRC futures that dampened sentiment. They also pointed to a short-term supply glut resulting from HRC cargoes from the north arriving in the eastern region.
Eastern China-based traders had booked large tonnages of HRC from the northern region a month ago when HRC prices in the north were much lower in comparison.
*** Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $520.07 per tonne, up $0.82 per tonne
A Zhejiang-based trader reported that a mill in northern China had sold some HRC to a few domestic trading houses at $515-520 per tonne fob earlier this week.
A Shanghai-based trader said that by Friday it was hard to secure cargoes at such prices due to domestic trading activity picking up.
He believes mills will keep prices above $520 per tonne fob.
A Hong Kong-based trader said buyers in Vietnam had withdrawn from the market following the price decreases in China’s domestic HRC market in recent days.
Some of them are now bidding at only $515-520 per tonne cfr Vietnam for SS400 HRC, which is equivalent to about $505-510 per tonne fob China.
A second Zhejiang-based trader said his customer in Vietnam was bidding for SS400 HRC at $515 per tonne fob China earlier this week.
*** Market chatter
“Although China’s HRC prices might have bottomed out today based on the active trading, Vietnamese buyers aren’t ready to restock. They only rush in to buy when they are certain that prices will rise in the longer term,” the Hong Kong-based trader said.
*** Shanghai Futures Exchange
The most-traded January HRC futures contract closed at 3,779 yuan per tonne on Friday, up by 47 yuan per tonne from Thursday.
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