China’s HRC prices have continued to fall since reaching a new annual peak on December 22 amid thin trading, sources told Fastmarkets on Tuesday December 29.
*** China’s HRC , Domestic
Eastern China (Shanghai): 4,550-4,580 yuan ($696-701) per tonne, down 50-70 yuan per tonne
One Shanghai-based trader said he could have secured some small deals at 4,560-4,580 yuan per tonne, yet a second Shanghai-based trader said she received no bids when she asked as low as 4,550 yuan per tonne.
Both sources said buyers are waiting for prices to further drop before they show willingness to restock, thus trading activity has been thin recently.
Market sentiment has become bearish after futures prices started falling last week, which then dampened spot prices, the trader sources added.
The first trader said HRC producers are still enjoying the profit margin of 300-400 yuan per tonne at the current price level, which means there is space for further price drops.
*** China’s HRC , Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $653.75 per tonne, down $1.25 per tonne
Most major mills kept their offers unchanged from the week prior at $700-740 per tonne fob China, however, one source at an eastern China-based mill told Fastmarkets, “There is a lot of space for negotiation.”
A Beijing-based trader said he could secure HRC from a private mill based in northern China at $630-635 per tonne fob but that mill does not export by itself, traders resell its products to overseas buyers.
Most sources received no bid from overseas, however, given that buyers believe prices could have further to fall.
Some sources believe major mills are likely to accept $650-660 per tonne fob if there is an order, Fastmarkets heard.
Additionally, some buyers are on leave for the Christmas holiday, which also contributed to market inactivity.
*** Market chatter
“There seems to be no end for price drops yet. Ferrous futures overall are weak after the government made efforts to curb speculation in the iron ore market, which hurt spot market prices,” a Zhejiang-based trader said.
*** China’s HRC , Shanghai Futures Exchange
The most-traded May HRC futures contract closed at 4,401 yuan per tonne on Tuesday, down by 17 yuan from Monday.
Reference: metal bulletin
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