Asian HRC rebounds amid rally in Chinese market

Asian hot-rolled coil prices rose for the first time in two weeks amid a strong rally in the Chinese market led by raw materials, which saw higher offers in the regional market, while buyers were waiting for a clearer market trend.

S&P Global Platts assessed SS400 HRC of 3 mm thickness at $765/mt FOB China Nov. 24, up $5/mt on the day. On a CFR Southeast Asia basis, the same grade of coil was assessed at $771/mt, up $3/mt on the day.

The Chinese spot market climbed on the day, driven by a strong futures market led by raw materials including coal and iron ore, amid reports that some mills would resume production from December after reaching the yearly output control targets.

One eastern China mill increased the SS400 HRC offer by $10/mt on the day to $800/mt FOB, while the offer level for a northern Chinese mill was heard at $780/mt FOB.

“After the domestic market corrected downward sharply, this round of price rebound might be more sustained,” a Chinese trader said. “Offers were all up, as futures surged and mills saw improved sales today,” a second trader said.

Some offers for Chinese SS400 were heard at $795-$805/mt CFR for January to February shipment. Buyers were heard waiting on the sidelines assessing the sudden rise in the Chinese market.

Platts assessed SAE1006 HRC at $815/mt FOB China, up $5/mt on the day. On a CFR Southeast Asia basis, the same grade of coil was assessed at $808/mt, up $5/mt over the same period.

In Vietnam, some low offers heard previously were absent on the day, due to the expectation of higher tradable levels for Chinese mills for SAE1006 HRC and an unclear market outlook. “The offer-bid spread is wide as … [the buyer] might be unable to secure SAE coils from Chinese mills below $830/mt CFR today,” a Vietnam-based trader said.

Some market sources in South Korea heard a major Chinese export mill suspend its offer to the market due to the strong rally seen in the Chinese market for both raw materials and steel.

In Shanghai, the spot price of Q235 5.5 mm HRC was assessed at Yuan 4,770/mt ($747/mt) ex-stock, including value added tax, up Yuan 95/mt on the day. The assessment had been moving lower since Oct. 20, falling more than Yuan 1,000/mt from Yuan 5,800/mt on Oct. 19.

The most actively traded January 2022 HRC contract on the Shanghai Futures Exchange closed at Yuan 4,599/mt, up Yuan 176/mt, or 4%, on the day.

Separately, Platts assessed Q235/SS400 grade 12-25 mm thick plate, or equivalent, at $840/mt CFR East Asia, down $4/mt on the week. The assessment was normalized to Dangjin port in South Korea.

Offers from Chinese mills were heard at $825-$875/mt FOB, but CFR offers were absent due to the lack of buying interest with the buyers’ indications far below the tradable level, a Chinese trader said.

Domestic prices of the same grade of material were at Yuan 5,060/mt ex-stock Shanghai, including value-added tax, down Yuan 10/mt week on week.

— Staff, Ashima Tyagi