China’s domestic hot-rolled coil prices edged closer to record highs last seen in July 2008 on Tuesday April 27 amid sustained measures to control emissions in the country’s northern region.
Eastern China (Shanghai): ۵,۷۶۰-۵,۸۰۰ yuan ($888-894) per tonne, up 20 yuan per tonne
Spot sellers in Shanghai offered cargoes at 5,780-5,800 yuan per tonne in the morning but lowered these to 5,760-5,780 yuan per tonne in the afternoon due to trading activity being weaker than on Monday, several sources told Fastmarkets.
But overall, prices have risen “very close to the record highs of 2008,” a Shanghai-based trader said.
HRC prices in eastern China were at 5,830-5,850 yuan per tonne in early July 2008.
Market sources attributed the strong market to ongoing measures to control emissions in northern China.
The government of Tangshan, China’s steelmaking hub, had ordered steel mills on Sunday to suspend their sintering equipment to curb pollution in the northern region over the three days to Tuesday.
HRC producers’ profit margins are around 1,000-1,300 yuan per tonne now, a Tianjin-based trader said.
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $۹۱۲٫۰۱ per tonne, up $3.96 per tonne
A Zhejiang-based trader said some traders were buying HRC from a private mill in northern China at around $910 per tonne fob to resell to overseas buyers.
But these cargoes do not comprise of mainstream grades for China’s export market.
These transactions aside, most major mills are offering cargoes at $930-940 per tonne fob. The trader in Zhejiang believes some buyers in urgent need of material will be willing to pay around $930 per tonne fob amid limited supply.
He said some traders had already secured a few orders for June-delivery rerolling-grade HRC at around $940 per tonne fob.
These cargoes, which are bound for Vietnam, were bought from a major mill in northern China. The mill had asked for just $820 per tonne fob last week, but on the condition that buyers shouldered all additional costs if the Chinese government reduces the country’s export tax rebate.
This week, the mill has issued on offer of $860 per tonne fob amid domestic price increases.
Talk continues to circulate in the market about the possibility of the 13% rebate for HRC being reduced to 9% or 4% – or removed completely – but there was still no official word at the time of writing.
While some mills have not factored in the possible rebate cut into their prices, most traders have already done so. As such, buyers would only be able to secure cargoes from Chinese traders at prices above $900 per tonne fob.
Market chatter ***
“Not only are domestic prices close to historical highs, I think China’s HRC export prices could also surpass the previous record because global HRC prices are strengthening amid limited supply. I remember the highest HRC price I that I had come across in 2008 was $1,240 per tonne,” a Taiwan-based trader said.
Shanghai Futures Exchange ***
The most-traded October HRC futures contract closed at 5,752 yuan per tonne on Tuesday, up by 15 yuan per tonne from Monday.
این مطلب بدون برچسب می باشد.