CHINA HRC: Prices stable amid low demand
China’s hot-rolled coil prices were largely stable on December 21 both domestically and in the export market with demand not showing any signs of a significant pick-up.
Trading was moderate nationwide during the day, though several sources described it as better than the last couple of days due to a few downstream buyers doing some restocking ahead of the weekend.
The stability in the spot market was not due to robust demand but because of concern over a possible supply shortage due to mills in the northern region cutting output to reduce emissions, a trader in Tianjin said.
Another trader in Zhejiang province described the spot market this week as “not very active” though price were stable.
Prices in Shanghai are down 10 yuan per tonne this week, while those in Tianjin are 70 yuan per tonne higher. The latter was attributed to output cuts in China’s northern region.
MB fob China HRC Index: $482.17 per tonne fob, down $0.33 per tonne
Few deals were heard during the day, with the Christmas holiday just around the corner.
A trader in Malaysia said he had not heard of any bids this week because most of his customers were “in a holiday mood, ready to take their annual leave instead of restocking further.”
He said buyers in that country were likely to be willing to pay $475-480 per tonne fob China if they had an urgent need of materials, since sellers in Taiwan were offering HRC at $550 per tonne cfr to them.
Chinese sellers will have to offer their products at much lower prices to secure orders due to Malaysia’s anti-dumping duties on cargoes from China.
Most Chinese mills are sticking to a minimum price of around $485 per tonne fob at the moment, however, since they are already sold out of February-delivery materials. Chinese steelmakers will start offering March-delivery HRC after January 1.
“Information about deals was limited today compared with the past few days. I believe even buyers in South Korea and South America - who accounted for most of the deals recently in China - are preparing for their holidays too,” a Beijing-based trader said.
Shanghai Futures Exchange
The most-traded May HRC futures contract closed at 3,467 yuan per tonne on Friday, up 8 yuan per tonne from Thursday.