Good demand and a strong futures market kept eastern China’s hot-rolled coil price on its upward trajectory on Friday April 23 despite mills’ high production rates.
*** China’s hot-rolled coil , Domestic
Eastern China (Shanghai): 5,590-5,610 yuan ($861-865) per tonne, up 10 yuan per tonne
Northern China (Tangshan) – weekly assessment: 5,500-5,530 yuan per tonne, up 60-70 yuan per tonne
Continued price rises since Wednesday took the eastern China HRC price up by 100-110 yuan per tonne week on week.
End users maintained a stable procurement rate of HRC for daily consumption because they do not have sufficient inventories, a trading source in Shanghai said.
But restocking demand was sparser because market participants expect prices to weaken in the near term, Fastmarkets learned.
This is because the high production rate may stop prices from rising further, a second trader in the city said.
Member mills of China Iron & Steel Association produced 2.32 million tonnes per day of crude steel during April 10-20, hitting a record high with a rise of 2.21% from the first 10 days of this month, according to the association’s data.
*** China’s hot-rolled coil , Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $880.59 per tonne, up $0.39 per tonne
HRC offers were flat at $880-890 per tonne fob on Friday. Market participants gave workable prices of $870-880 per tonne fob.
Chinese export prices have become more attractive for overseas buyers than other origins’ products. For instance, Fastmarkets’ assessment for steel hot-rolled coil (commodity) export, fob main port India was at $920-1,025 per tonne on April 16, up by $20-25 per tonne from a week earlier.
But another wave of Covid-19 infections in India has dampened sentiment in some other Asian countries, due to concern that manufacturing industries may not be able to maintain normal operations. This has made overeas buyers more prudent in booking Chinese HRC, an export trader in eastern China said.
*** Market chatter
“Handan city which called for mills to cut emissions in the second quarter on Thursday is a major production base of hot-rolled coil, steel plate and some other flat steel. Adding to another big flat steel production base Tangshan that has already implemented production restriction, HRC supply will decrease for rest month of this year,” an industry analyst said.
*** Shanghai Futures Exchange
The most-traded October HRC futures contract closed at 5,590 yuan per tonne on Friday, up by 38 yuan per tonne from Thursday.
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