China’s hot-rolled coil prices rallied on Monday March 8, supported by gains in the futures market, while trading was moderate amid concerns of a possible export rebate cut.
***Domestic
Eastern China (Shanghai): 4,950-4,980 yuan ($763-767) per tonne, up 150 yuan per tonne
Several Shanghai-based traders said spot sellers raised offers in response to gains in the futures market. Market sentiment has improved in China after steel production was cut in Tangshan, the steelmaking hub in northern China.
Several domestic media outlets reported last week that the Tangshan local government has ordered several local mills to shut blast furnaces covering 450 cubic meters before March 10 to help curb air pollution.
Billet price gains in Tangshan over the weekend also motivated investors to enhance long positions in the flat steel market, a Shanghai-based trader said.
Several Shanghai-based traders said spot sellers raised offers in response to gains in the futures market. Market sentiment has improved in China after steel production was cut in Tangshan, the steelmaking hub in northern China.
Several domestic media outlets reported last week that the Tangshan local government has ordered several local mills to shut blast furnaces covering 450 cubic meters before March 10 to help curb air pollution.
Billet price gains in Tangshan over the weekend also motivated investors to enhance long positions in the flat steel market, a Shanghai-based trader said.
*** hot-rolled coil Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $714.81 per tonne, up $3.03 per tonne
Most mills have not updated offers, but a private mill in northern China was heard offering $770 per tonne fob this week, up by $10 per tonne from $760 per tonne fob the week prior. Some traders expect other mills would follow to raise offers on Tuesday.
Trading was thin in China’s HRC export market, with traders waiting for the government to confirm whether the HRC export rebate will be changed.
Some market participants believe the rebate will be cut to 9% from the current 13%, which could affect appetite for exported cargo.
Some stockists offered March-delivery HRC at around $730 per tonne cfr Vietnam, equivalent to around $707 per tonne fob China, but a Zhejiang-based trader said Vietnam buyers could accept around $700 per tonne fob China at most.
Most mills have not updated offers, but a private mill in northern China was heard offering $770 per tonne fob this week, up by $10 per tonne from $760 per tonne fob the week prior. Some traders expect other mills would follow to raise offers on Tuesday.
Trading was thin in China’s HRC export market, with traders waiting for the government to confirm whether the HRC export rebate will be changed.
Some market participants believe the rebate will be cut to 9% from the current 13%, which could affect appetite for exported cargo.
Some stockists offered March-delivery HRC at around $730 per tonne cfr Vietnam, equivalent to around $707 per tonne fob China, but a Zhejiang-based trader said Vietnam buyers could accept around $700 per tonne fob China at most.
*** Market chatter
“If the futures market continues to be strong, I believe China’s prices will further gain. But I dare not offer April-delivery HRC to my overseas customers. It’s not about whether I can find cheaper goods from mills. If [the government] really cuts the export rebate, I could not bear the burden of possible losses,” a second Shanghai-based trader said.
*** Shanghai Futures Exchange
The most-traded May HRC futures contract closed at 4,964 yuan per tonne on Monday, up by 86 yuan per tonne from Friday.
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