Hot-rolled coil prices in China’s domestic market traded in a wider range on Tuesday June 1, following the choppy trading in the futures market while market participants looked closely at the production curbs in Tangshan, sources said.
Domestic ***
Eastern China (Shanghai): ۵,۴۳۰-۵,۶۰۰ yuan ($852-879) per tonne, widening downward by 70 yuan per tonne.
HRC trades across China’s eastern region were weak on Tuesday morning and prices fell below 5,500 yuan per tonne after futures prices stopped their rally on the potential easing of production curbs in Tangshan – China’s top steelmaking hub and home to a large number of HRC producers.
The futures market clawed back the losses in afternoon trades, however, because the provincial government disapproved of the proposal, sources said.
The lack of action spurred trading activity in the spot market, which took spot prices back up close to 5,000 yuan per tonne.
Export ***
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $۹۱۳٫۱۶ per tonne, down by $0.49 per tonne.
China’s HRC export market remained quiet on Tuesday and market participants kept a close eye on whether the country will impose tariffs on HRC exports.
Aside from the export tariff uncertainty, volatile domestic prices also prompted overseas buyers to take a ‘wait-and-see’ approach.
A mill in the northern region cut its offers by $35 to $1,015 per tonne fob while an eastern mill raised its offer by $50 to $1,000 per tonne fob and another trading house was willing to sell its product at $855 per tonne fob.
One mill in the east was heard to have sold small quantities of SS400-grade HRC at $950-955 per tonne fob, but this was not included in the calculation for the price assessment because the deal fell outside of the transacted quantities allowed in Fastmarkets’ index methodology.
There was also a transaction for several hundred tonnes of July-delivery SS400-grade HRC concluded at $930 cfr Karachi, which is equivalent to approximately $885 per tonne fob China.
Market Chatter ***
Despite the uncertainty surrounding the production curbs, the possibility that China’s domestic HRC prices will break below last week’s price trough is “very low,” a trader said, due to the support from the raw materials side.
Shanghai Futures Exchange ***
The most-traded October HRC contract closed at 5,437 yuan per tonne on Tuesday, up by 83 yuan per tonne from Monday’s close and marking a fourth consecutive day of gains.
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