China’s domestic hot-rolled coil prices continued to rise on Thursday June 10, with the futures market also extending its rally.
Domestic
Eastern China (Shanghai): 5,600-5,620 yuan ($876-879) per tonne, up by 70 yuan per tonne.
While futures prices of raw materials – including iron ore, coking coal and coke – halted their recent rallies, those for HRC rose for a third straight day on Thursday.
The most-traded HRC futures contract on the Shanghai Futures Exchange jumped to a four-day high of 5,516 yuan per tonne during morning trade, before retreating in the afternoon session.
Price gains in the spot market were smaller than those in the futures market due to the upcoming seasonal demand lull casting a shadow over the physical market, while the most-traded futures contract is that for October delivery, traditionally a period of increased demand, sources said.
Talk of production curbs in Jiangsu province, a major steelmaking hub in east China, supported steel prices on Thursday, a Hangzhou-based trader said.
These discussions emerged after China’s state planner urged some local governments to step up their efforts in cutting energy intensity, aiming for a 3% decline in 2021, during a meeting held in Hangzhou on Wednesday.
In a report on energy consumption control in the first quarter of 2021, Jiangsu received a second-level (or yellow) alert in a three-level system – where the first- and second-level alerts suggest poor performance in cutting energy consumption.
Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $905.31 per tonne, up by $1.75 per tonne.
Chinese steelmakers held their offers firm amid stable domestic prices, with offers from major mills above $945 per tonne fob, market sources said.
One Shanghai-based trader expects $920 per tonne to be a workable level for transactions while a second Shanghai-based trader concluded deals at $900 per tonne fob and smaller mills offered their product at around $920 per tonne.
The export market remained quiet with limited transactions, sources said.
Market chatter
“The volatile prices [in the domestic spot market] weakened trading activity,” the Hangzhou-based source said.
Shanghai Futures Exchange
The most-traded October HRC contract closed at 5,448 yuan per tonne on Thursday, up by 82 yuan from Wednesday’s close.
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