Chinese hot rolled coil export prices skyrocketed last week due to demand and strong push from domestic prices, but both spot and futures markets slumped from Thursday aalmost as fast as their rise at the beginning of the week, Kallanish notes.
In Shanghai on Friday afternoon, 5.5×1,500mm Q235 HRC was traded at around CNY 6,220-6,230/tonne ($965-966/t), falling from the weekly peak of nearly CNY 6,700/t on Wednesday, but up CNY 145/t from the previous Friday. On the Shanghai Futures Exchange, October 2021 HRC futures closed CNY 303/t lower than Thursday but CNY136/t higher than the previous Friday at CNY 6,135/t.
The deteriorating Sino-Australian relations and hype about possible production restrictions pushed up prices sharply until Wednesday, supported by the continuing drawdown in inventories. The State Council meeting on Wednesday and the Tangshan government’s talk with all local steelmakers on Friday cooled down markets quickly however. At the State Council, Li Keqiang said China must control commodity price increase, and on Friday Tangshan warned mills not to fuel speculation or hike prices sharply.
In export markets, offers also soared, and despite declining prices mills have resisted lowerin their offers. “Weaker acceptance for price hikes was seen, but some buyers in Vietnam did catch up,” a source said on Friday.
A trading company in East China sold several thousand tonnes of 30% 2mm SAE 1006 HRC at $1,060-1,070/t cfr Vietnam and SS400 HRC at $1,030/t cfr Vietnam on Thursday. While prices fell again one day later, “$1,050-1,060/t cfr Vietnam is still reasonable today,” the trader did the transaction added.
Major Chinese steelmakers such as Benxi Steel and Shandong Steel Rizhao have lifted their offers to $1,080-1,090/t cfr Vietnam for SAE 1006 HRC cargos with a range of thickness for July shipment. As for 100% 2mm SAE 1006 HRC, Baosteel’s quotations came to $1,100/t cfr Vietnam.
Kallanish assessed 2mm SAE 1006 HRC at $1,015-1,025/t fob China on 7 May, up $72.5/t on-week.
By Kallanish Team
