Hot-rolled coil prices in China’s domestic market trended lower on Tuesday June 15, while export prices extended their gains and the volatile futures market deterred market participants from figuring out a clear direction, sources said.Domestic
Eastern China (Shanghai): 5,550-5,580 yuan ($867-872) per tonne, down by 60-70 yuan per tonne.
The most-traded HRC contract on the Shanghai Futures Exchange dropped more than 200 yuan to 5,300 yuan per tonne after trading resumed from an extended holiday weekend, while the ferrous complex got off to a weak start across the board, sources said.
The sharp decline subdued spot prices and trading in the physical market, Fastmarkets heard.
“Traders don’t buy on the way down,” a source from an east China-based mill said.
The above source believes steel prices will remain in a rangebound trading pattern into July due to the demand weakness in a slack season and given the cost support. Although, despite the growing levels, steel inventories are not as high as compared to previous years, the source added.
Steel mills are reporting much thinner profits now, compared to the month of May, the source said.
Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $913.16 per tonne, up by $6.49 per tonne.
Export prices rose after some trading houses raised their offers or assessments following the sharp gains in domestic prices in the week previous, sources said.
One Shanghai-based trader hiked their assessment by $10 per tonne from Friday June 11 to $910 per tonne fob China on Tuesday June 15.
An eastern China steel mill concluded deals of near 3,000 tonnes of ss400-grade HRC at $940-950 per tonne fob China to South Korea for July-delivery in the week previous – around $10 lower than the levels the mill reported a week earlier, Fastmarkets heard.
Meanwhile, a second trader said his $900-per-tonne offer was hardly attracting any buyers.
All sources that spoke to Fastmarkets said that the possible export tax had kept overseas buyers on the sidelines while higher ocean freight costs were another emerging concern, the second trader said.
Market chatter
“The high overseas prices are supporting China’s domestic and export prices. Downstream end users in the domestic market are unwilling to accept the high prices,” a Jinan-based source said. “Market participants should monitor the Chinese government’s monetary and fiscal policies.”
Shanghai Futures Exchange
The most-traded October HRC contract closed at 5,436 yuan per tonne on Tuesday, down by 174 yuan or 3.1% from the close on June 11.
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