Chinese HRC Export Offers Rises amid Strong Domestic Sentiments

Although HRC export offers are rising W-o-W basis, trade sources have informed SteelMint that buyers are quite reluctant to make any bookings at current rates.

With the start of week 17, Chinese HRC prices surged by another USD 15-20/MT backed by price rally in domestic market. Current HRC export offers from China are heard at USD 420-425/MT, FoB China basis.

The key reason behind the price rally is historically low inventories post Lunar New Year holidays in country’s domestic market

Steel prices in China hit record low in 2015 amid overcapacity and supply glut. Chinese government tightened capital supply in the market resulting which steel mills have to cut or halt their production.

Many infrastructure projects which were approved last year started post Lunar New Year holidays resulting in increased steel demand in China’s domestic market. Thus, tight capital supply, low inventories, production cut and increased demand led to sharp price rebound in steel prices in China.

However, trade sources have informed SteelMint that no trades are being carried out at current price levels. Chinese players are mainly concentrating on domestic sales resulting which they have raised flat products export offer.

Following Chinese sellers, exporters based in Japan and CIS countries have also raised their flat products export offers.

HRC offers from Japan are assessed at USD 390-400/MT, FoB basis whereas no fresh offers are currently being heard from Korea. CIS countries offers are heard at USD 415-420/MT, FoB Black Sea. HRC offers from Japan to Bangladesh are assessed at USD 460-470/MT, CFR Chittagong.

HRC Prices as on 18 Apr’16

 SteelMint Research