Posted on 09 Nov 2020
Hot rolled coil prices were pushed to new highs by various forces late last week, after starting the week flat, Kallanish notes.
In Shanghai on Friday afternoon, 5.5x1,500mm Q235 HRC was traded at around CNY 4,060-4,080/tonne ($613-616/t), up CNY 80/t from the previous Friday. On the Shanghai Futures Exchange, the January 2021 HRC contract closed CNY 17/t higher than Thursday, and CNY 56/t higher over the week at CNY 3,920/t. It continued to rise throughout the week and has returned to the levels of early September.
From Monday, the market was guided by strong demand and declining inventory amid end users' interest to replenish before winter. Improvement in construction activity made steel stocks drop by over 1 million tonnes for two consecutive weeks. With the withdrawal of coking enterprises in various provinces, coke price increases have also quickly spread to HRC.
Higher prices may have an impact on buying levels in the coming days, however. "Although the high prices do not impact buyers’ interest now, the pressure of such high prices may stop their purchases soon if the prices do not fall," a HRC seller says.
Export markets also saw a rising trend. Offers started to increase from Wednesday and reached a high last Friday. Kallanish assessed 2mm SAE 1006 HRC up $16/t on-week at $528-533/t fob China. South Korean buyers have started to accept China-origin SAE 1006 HRC at $540/t cfr since last Friday.
Before the price hike, MMK sold SAE 1006 HRC at $518-510/t cfr Vietnam for February shipment, and offered at $525/t cfr Vietnam. Its delivery date is around one month later than other suppliers.
Rizhao sold 20,000 tonnes of SAE 1006 HRC at $528/t cfr Vietnam for January shipment around last Monday, which Hoa Sen and Kim Quoc bought jointly. Feeling the price increase, Rizhao Steel quickly lifted its offers from $525/t to $545/t cfr Vietnam for January shipment last Friday.
Hyundai lifted SAE 1006 HRC offers to $550/t cfr Vietnam on Friday, as did Nippon Steel and JSW Steel. Benxi, however, set its new offer at $545/t cfr Vietnam, level with Rizhao Steel.
Baosteel's 2mm SAE 1006 HRC was booked at $553/t cfr on Friday, sources in China and Vietnam confirmed.
On Friday, Kallanish assessed 2-2.7mm SAE1006 HRC at $538-543/t cfr Vietnam, up $13 on-week.
Source:Kallanish
