China: HR Flats exporters forced to back down

Chinese HR flats price still tend to go down in mid of September on domestic and International moderate demand. 

Chinese domestic market Situation is not giving any advantages to exporters. Price of HRC has dropped USD 5/t. Currency fluctuations (RMB 30/t) in a week resulted 3 mm and 4.75 mm HRC grade SPHC made to JIS G3131 is being offered to locals at USD 595-605/t (RMB 3,635-3,705/t, $1 = RMB 6.1292) ex-warehouse and at USD 605-615/t (RMB 3,715-3,785/t) ex-warehouse respectively, incl. 17% VAT. Traders' reserves have minimized by 0.9% to 4.07 MT. However, demand is still not sufficient for sellers to lift prices, considering that the market is still oversupplied.

Chinese trading companies selling the material in exerting pressure which has produced in previous months. With mills quoting 2 mm HRC grade SAE1006B at USD 560-570/MT FOB, traders are ready to close contracts for same grade at USD 530-550/MT FOB. Chinese trader sold a lot of 2 mm HRC for grade SAE1006B at USD 535/MT to Vietnamese buyers early this week. Vietnamese re-rollers show little interest in purchases of HR coils in the falling market. To cover urgent needs they buy small quantities only from traders who are ready to grant big discounts.

The majority of Chinese supplier offers JIS G3101 grade at USD 545-550/MT FOB against USD 550-560/t FOB a week previously and the lowest price Offers are coming USD 540/t FOB. 

As a result, the general price range for Chinese HR coils and sheet grade SS400 made to JIS G3101 is available  at USD 540-555/MT FOB and USD 530-545/MT FOB respectively; HRC grade SAE 1006B is available at USD 560-570/MT FOB.

Experts are expecting that market will remain in same level in September as Chinese exporters will not be able to raise prices again until the end of September, but there will be no quick falls either. Demand for Indian material, which is available at USD 535/MT FOB (USD 560-565/MT CFR SE Asia), has declined particularly. Besides, most of regional currencies are revaluating over again. On top of that, construction activity in China and SE Asia will see a seasonal improvement starting mid-September.