Hot-rolled coil prices across China’s domestic market continued to move lower on Tuesday June 22, while futures prices extended their decline, sources said.
Domestic ***
Eastern China (Shanghai): ۵,۲۷۰-۵,۳۱۰ yuan ($815-821) per tonne, down by 90-120 yuan per tonne.
The most-traded HRC contract on the Shanghai Futures Exchange slipped in morning trade, approaching a four-week low of 5,070 yuan per tonne in overnight trading, then followed the ferrous complex higher in afternoon trade to close the day slightly lower from Monday’s close.
Bargain-hunting spurred trading activity in the morning, before prices clawed back some losses in the afternoon, sources said.
One Shanghai-based trader attributed the poor demand to the recent decline in steel prices.
Prices are also under downward pressure from stable output, which suggests that production curbs on mills have had a limited effect on production, a Hangzhou-based trader told Fastmarkets.
China has launched nationwide supervision and inspections on safe production, targeting 15 key industries including coal and non-coal mining. The campaign from the Safety Production Committee of the country’s State Council started on Monday June 21 and will continue through early July, a report from the country’s Ministry of Emergency Management said on June 21.
Steel making was not mentioned, however, this round of inspections should affect mines’ operations, which sparked concerns over raw material supplies, sources said.
Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $۸۹۵٫۳۳ per tonne, down by $2.37 per tonne.
The index fell after mills and trading houses lowered their offers and assessments in the wake of the losses in domestic prices.
Lower domestic prices and persistent concerns over China’s export tax policy kept overseas buyers in a wait-and-see mode, sources said.
Some buyers do not think China’s prices have hit the bottom yet, a Jinan-based trader said. There is a bid from Vietnam at $885 per tonne cfr, about $865 per tonne fob China, compared to offers of $885-900 per tonne fob China.
Over the week, there was a deal of 4,000 tonnes of ss400-grade HRC concluded at $910 per tonne fob China for July delivery, a second Hangzhou-based trader said.
Market chatter ***
“The [value-added] tax rebate for exports of cold-rolled coil and hot-dipped galvanized steel is very likely to be removed,” the Jinan-based trader said.
“I don’t think the tax will be imposed on HRC exports in the short term and steel mills have similar views,” a second Shanghai-based trader said.
Shanghai Futures Exchange ***
The most-traded October HRC contract closed at 5,153 yuan per tonne on Tuesday June 22, down by 17 yuan or 0.33% from Monday’s close.
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