CHINA HRC: Domestic price rallies for second day
Hot-rolled coil prices in China’s domestic market rose again on Friday May 28, following a rally in the futures market.
Eastern China (Shanghai): 5,400-5,500 yuan ($848-864) per tonne, up by 150-180 yuan per tonne.
Northern China (Tangshan): weekly assessment: 5,350-5,380 yuan per tonne, down by 250-270 yuan per tonne.
The most-traded HRC October contract on the Shanghai Futures Exchange reached an intraday high of 5,385 yuan per tonne on Friday morning, which pushed up spot market prices.
Activity in China’s eastern market weakened slightly from Thursday but remained sufficient for traders, although the price rebound was “a bit fast,” a trader said.
A second source said he expected HRC prices to trade rangebound.
Despite substantial gains since Wednesday, HRC prices in eastern China remain 180-270 yuan per tonne lower than last Friday’s price of 5,670-5,680 yuan per tonne, and down 1,210-1,280 yuan per tonne from their record high of 6,680-6,710 yuan per tonne on May 12.
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $907.4 per tonne, up by $26.81 per tonne.
An eastern mill raised its HRC export offer price by $20 per tonne to $930-935 per tonne fob, in response to domestic price gains.
Some market participants put the workable price for steel mills at no less than $900 per tonne, but buyers remain cautious due to uncertainty about whether China will impose an export tariff on HRC.
While no official news has been released, a few traders told Fastmarkets that the tariff notice will be published on June 1.
“A major mill in northeast China was heard to withdraw its offers for all products today, including HRC, and this is a sign that the tariff will be disclosed very soon,” an exporter said.
Shanghai Futures Exchange
The most-traded October HRC contract on the SHFE closed at 5,328 yuan per tonne on Friday, up 142 yuan per tonne from Thursday’s close.
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