China’s domestic hot-rolled coil prices dipped on Friday July 2 on retreating futures, with sentiment being subdued by a lifting of production and logistical curbs in northern China that were imposed in the past week.
Domestic
Eastern China (Shanghai): ۵,۴۳۰-۵,۴۸۰ yuan ($838-846) per tonne, down by 20-30 yuan from 5,460-5,500 yuan per tonne.
Northern China (Tangshan) weekly assessment: ۵,۳۲۰-۵,۳۸۰ yuan ($821-830) per tonne, up by 40-50 yuan from 5,280-5,330 yuan per tonne
The most-traded HRC contract on the Shanghai Futures Exchange was traded in a tight range during the day, failing to recover from overnight losses.
Mills in the country’s steelmaking hub of Tangshan resumed production after the lifting of restrictions imposed ahead of the July 1 centennial of the Chinese Communist Party in neighboring Beijing, sources said.
This weighed on sentiment in the market and snapped two days of price increases.
Weak demand amid an ongoing low season also limited the upward momentum in the futures market, a Shanghai-based trader said.
Trading activity in the spot market was low on Friday amid muted buying among downstream consumers, sources said.
Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $۸۴۴٫۷۴ per tonne, down by $1.16 per tonne.
Export prices also dipped during the day amid a retreating domestic market.
Sources at trading companies continued to indicate market prices for SS400 HRC at around $840-850 per tonne fob.
They said that the emergence of low-priced Russian cargoes in recent days as a result of Russia’s plan to introduce an export tax from August have yet to affect export prices for Chinese cargoes.
But uncertainties remain over whether China will impose an export tax of its own on steel products. These concerns are slowing down negotiations, a Hong Kong-based trader said.
Market chatter
“Today’s retreat in the futures market is just a normal adjustment. The impact of the recovery of production in Tangshan [on the market] is limited, but weak demand is limiting any potential upside in prices. Prices are likely to remain rangebound,” a second Shanghai-based trader said.
Shanghai Futures Exchange
The most-traded October HRC contract ended at 5,418 yuan per tonne on Friday, down 10 yuan from a day earlier.
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