China’s hot-rolled coil prices remained firm on Friday July 31 amid continuous supply shortages in the east of the country, sources told Fastmarkets.
***Domestic
Eastern China (Shanghai): ۳,۹۷۰-۴,۰۰۰ yuan ($567-571) per tonne, up 20-30 yuan per tonne
Northern China (Tangshan) – weekly assessment: ۳,۷۴۰-۳,۷۷۰ yuan per tonne, down 50-60 yuan per tonne
Sellers were offering material at around 3,970 yuan per tonne on Friday morning in Shanghai, with prices gaining to around 4,000 yuan per tonne in the afternoon amid gains in futures prices.
A Shanghai-based trader said trading was moderate, but buyers were willing to pay higher prices due to tight supply.
Inventories of SS400-grade HRC in eastern China have been low for several weeks. Over the past few months, traders have refrained from selling HRC from northern China – the country’s steelmaking hub – to the east due to stronger prices, and therefore higher profit margins, in the north compared with other regions.
But things could change in the next few weeks because prices in Shanghai are now stronger than those in the north.
Over the past week, HRC prices in Shanghai have gained 40-50 yuan per tonne, while those in Tangshan have fallen by 50-60 yuan per tonne.
The Shanghai-based trader said sellers in the north have already signed many deals to the east this week, with the goods to arrive in Shanghai in around three weeks.
***Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $۴۸۵٫۸۹ per tonne, up $0.06 per tonne
Most major mills are offering at $490-500 per tonne fob this week and traders believe $485-490 per tonne fob to be the lowest achievable level in the case of genuine orders.
Trading was sparse, with Pakistan buyers contributing several small deals this week.
A Zhejiang-based trader heard Pakistan booked several deals involving small tonnages from China earlier this week at $502-505 per tonne cfr. This is equivalent to $482-485 per tonne fob China.
But he believes such deals were done by traders with position cargoes, because most mills could not accept such a level.
Some Pakistan buyers are raising bids amid China’s domestic price gains. The trader said he received a bid at $487 per tonne fob China, but has not signed a deal with the customer.
Vietnam was quiet with a trader saying buyers there are bidding $475 per tonne cfr Vietnam, while sellers are offering at $485 per tonne cfr Vietnam. The former price is equivalent to $465 per tonne fob China.
***Market chatter
“I heard China’s HRC importers are bidding $470-475 per tonne cfr this week at the most – already big gains from last Friday when domestic prices tumbled. But I didn’t hear deals because Indian sellers are offering at least $485 per tonne cfr China,” a second Shanghai-based trader said.
***Shanghai Futures Exchange
The most-traded October HRC futures contract closed at 3,848 yuan per tonne on Friday, up by 29 yuan per tonne from Thursday.
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