China: Export Prices for HR Coils and Sheets likely to fall 

The Chinese market for HR coils and sheets keeps trending upwards on the back of growth in imported Iron ore prices (USD 6/MT up in a week) as well as some improvement domestically. However, the general price range has remained unchanged week-on-week.

SS 400 HR coils and sheets made to JIS G3101 are being quoted at USD 535-550/MT FOB and USD 525-540/MT FOB respectively. SAE1006B HR products are available at USD 550-575/MT FOB.

Rizhao Steel, whose material was priced at the bottom end of the general range last week, is offering SS 400 HR coils made to JIS G3101 to foreign buyers at USD 535-545/MT FOB. The producer has also lifted domestic prices by USD 10/MT with currency fluctuations (RMB 50/MT) over three weeks. Benxi Iron & Steel has left quotations to overseas customers unchanged, whereas Shagang Group has put them up to USD 550/MT FOB (USD 545-550/MT FOB in early August).

Demand remains weak in the major sales outlets. Buyers are insisting on additional discounts finding current offers unreasonably high. Vietnamese customers report bid prices have decreased by USD 5-15/MT over the week. Specifically, they are ready to consider offers of SS400 HR coils made to JIS G3101 from China at USD 525-530/MT FOB and SAE1006B grade – USD 540-545/MT FOB.

Suppliers feel pressure of tougher competition in the region as well. Some Japanese producers are quoting SAE1006B products to Vietnam at USD 555/MT FOB (USD 575/MT CFR Ho Chi Minh). Moreover, buyers even manage to bargain prices down to USD 545/MT FOB (USD 565/MT CFR Ho Chi Minh).

Under such conditions, Chinese trading companies do not dare to push up prices. Offers of SS 400 material made to JIS G3101 and SAE1006B grade are coming to SE Asia at USD 540-545/MT FOB and USD 555-560/MT FOB respectively.

Market insiders generally agree that Chinese exporters of HR coils and sheets will hardly succeed in raising prices further. Moreover, most traders believe that the Chinese market will see the downward trend in late August due to heavy stocks of both traders and mills. Sellers do not benefit from the expected decline in imported iron ore prices and competition with regional suppliers.

Moreover, domestic demand from end users remains slack as traders' stocks have decreased just by 1% over the week to 4.23 MT. However, stockist's prices in the national currency have added RMB 10-20/MT over the same period. Thus, 3 mm and 4.75 mm SPHC products made to JIS G3131 (similar to SAE1006) are being quoted to local buyers at USD 590-600/MT (RMB 3,615-3,685/MT; USD 1 = KRW 6.1322) ex-warehouse and USD 605-615/MT (RMB 3,700-3,770/MT) ex-warehouse respectively, including 17% VAT.

– Sourced