China’s hot-rolled coil prices remained at their historical high on Tuesday May 11 amid stable demand, after surging up by around 600 yuan per tonne over the weekend, sources said.
Domestic ***
Eastern China (Shanghai): ۶,۵۰۰-۶,۶۰۰ yuan ($1,012-1,027) per tonne, narrowing upward by 30 yuan per tonne
One Shanghai-based trader said spot sellers there were offering around 6,500 yuan per tonne in the morning before raising prices to 6,600 yuan per tonne in the afternoon after futures gained.
Trading activity weakened slightly day on day but most sources said overall demand remained stable.
One source at a construction equipment company – an end user of flat steel – complained their profits are minimal due to “crazy raw material prices,” but they had no choice but to buy because many market participants believe the growth in steel prices has not ended.
A second Shanghai-based trader said investors remain interested in the ferrous sector, especially when demand is currently in high season.
Also, the government’s enhanced efforts to curb carbon emissions in China have also given support to steel price growth because steel producers need to control production to help realize the goal, the second trader said.
Export ***
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $۱۰۴۱٫۷۸ per tonne, down $0.64 per tonne
Inner Mongolia-based Baotou Iron & Steel was heard offering $1,035 per tonne fob, while a source at east China-based Shandong Iron & Steel said they were offering $1,100 per tonne fob.
One source at a second eastern China-based mill said they were offering $1,060 per tonne fob.
A Zhejiang-based trader said most overseas buyers have not been able to accept such high prices, with them looking for inventories from traders.
He said he could sell inventories at $50-per-tonne below the market average of around $1,040 per tonne fob, although many inventories are May/June delivery while mills’ mainstream delivery time is July.
One Vietnam-based steel producer Formosa Ha Tinh was heard offering $1,030-1,035 per tonne for July-delivery HRC in Vietnam, which is up by $110-120 per tonne from last month following China’s price surges.
Market chatter ***
“I believe offers from Japan and South Korea will also gain after surges in China. Buyers would be forced to accept higher prices because inventories are limited,” a second Zhejiang-based trader said.
Shanghai Futures Exchange ***
The most-traded October HRC futures contract closed at 6,540 yuan per tonne on Tuesday, up by 205 yuan per tonne from Monday.
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