China HRC prices fell on Wednesday August 26 amid thin trading, with market sentiment dampened by the impact of Typhoon Bavi.
*** Domestic
Eastern China (Shanghai): ۴,۰۲۰-۴,۰۳۰ yuan ($582-583) yuan per tonne, down 20-30 yuan per tonne
Several Shanghai-based traders said trading there was thin on Wednesday, forcing some sellers to offer at just ۴,۰۰۰ yuan per tonne in the afternoon to win orders.
They are not sure whether such price was acceptable for buyers, but said the dominant traded level was 4,020-4,030 yuan per tonne on Tuesday.
One of the Shanghai-based traders said the price drop was due to weakening market sentiment triggered by Typhoon Bavi, which generated heavy rains in northeast China on Tuesday.
Prices tumbled in northeast China with sellers rushing to clear stocks amid the bad weather, followed by the price drops in Shanghai.
That was because some traders in the east have been booking HRC from the north and some sources now expect HRC prices in Shanghai to fall further in the next few days because the typhoon has restricted deliveries of HRC from northern China.
After the goods arrive in Shanghai next week, sources expect prices to fall further amid inventory gains.
*** Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $۵۰۷٫۵۳ per tonne, down $2.08 per tonne
Most traders expect mills to accept $505-510 per tonne fob for HRC of SS400 grade if buyers place orders, widening downward from $510 per tonne fob earlier this week because of weakening domestic market.
But China’s HRC export remained inactive, with most overseas buyers bidding lower.
A Zhejiang-based trader said Pakistan was only accepting $495-500 per tonne fob for HRC of SS400 grade.
A Vietnam-based trader, meanwhile, said ۲۰,۰۰۰ tonnes of HRC of rerolling grade was booked from India at $517 per tonne cfr earlier this week, equivalent to around $507 per tonne fob China.
But for HRC of SS400 grade, he added, Vietnamese buyers would be looking for a discount of around $5 per tonne due to the limited demand.
*** Market chatter
“The influence of the typhoon should be short term. In the longer term, we [will wait and see if] demand in eastern China rises to offset the growing inventories. Personally, I believe the demand hasn’t been very strong, so prices could fall in the next few weeks,” a second Zhejiang-based trader said.
*** Shanghai Futures Exchange
The most-traded October HRC futures contract closed at 3,928 yuan per tonne on Wednesday, down by 10 yuan per tonne from Tuesday.
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