Posted on 18 Oct 2022
Prices of Chinese hot-rolled coil (HRC) for exports retreated over October 8-14 after the prior week's short-lived increase, mainly due to the softening in domestic prices, feeble demand in overseas markets, as well as the further weakening of Chinese Yuan against U.S. dollar.
The export price of China-origin SS400 4.75mm HRC under Mysteel's assessment decreased by $13/tonne on week to $557/t FOB as of October 14, while that of SPCC 1.0mm cold-rolled coil declined by $8/t on week to $625/t FOB, both from North China's Tianjin port.
Last week, wait-and-see sentiment intensified in Chinese steel market, and most mills stated that tradable HRC export prices were slightly higher than domestic market prices.
For example, China's national price of Q235 4.75mm HRC under Mysteel's assessment dropped further to Yuan 3,997/t ($556/t) including the 13% VAT as of October 14, down by Yuan 86/t from October 8. Meanwhile, some mills lowered their HRC offering prices for exports by $10-15/t to $570-580/t FOB to facilitate sales, Mysteel Global learned.
However, the buying interest among Southeast Asian buyers was dull, with inquiries around $550/t CFR -- a price that most Chinese steelmakers couldn't accept, according to a trader in Hangzhou, East China's Zhejiang province.
The pessimism was also evident in overseas steel markets. High costs led to even greater losses for steelmakers globally. For example, HRC prices in Europe fell sharply by $55/t to $675/t during the week, adding up to a total decline of 58% from the high of $1,600/t in late March, while electricity prices in the region had risen fivefold during the same period, Mysteel Global noted.
Besides, most global market participants chose to stay on the sidelines with the softening of Yuan-dollar exchange rate. By October 17, the central parity rate of Chinese Yuan against U.S. dollar was Yuan 7.1095=$1, according to the data released by China Foreign Exchange Trade System.
Source:Mysteel Global
