Posted on 15 Nov 2022
Prices of Chinese hot-rolled coil (HRC) for exports enjoyed a slight recovery over November 7-11, thanks to the strengthening of domestic prices and the appreciation of Chinese Yuan against US dollar last week.
By November 11, the export price of China-origin SS400 4.75mm HRC under Mysteel's assessment reversed up by a tiny $1/tonne on week to $516/t FOB, while that of SPCC 1.0mm cold-rolled coil continued its downward trend, losing $2/t on week to $588/t FOB, both from North China's Tianjin port.
The overall sentiment in Chinese HRC market was boosted by good news at home and abroad. Last Friday, the Chinese government announced a series of optimizations to COVID prevention and containment measures, which would ease COVID-induced disruptions of the country's industrial production.
In addition, the US Consumer Price Index (CPI) for October rose 7.7% on year, according to the data released by the US Bureau of Labor Statistics on November 10. The softer-than-expected CPI led the global market to anticipate that the US Federal Reserve may slow down the pace of making more aggressive interest rate hikes in December and beyond.
China's HRC market reflected the improved sentiment with both spot and futures prices going up – the national price of Q235 4.75mm HRC under Mysteel's assessment increased to Yuan 3,848/t ($541.4/t) including the 13% VAT as of November 11, gaining Yuan 45/t from November 4.
Meanwhile, the most-traded HRC January contract on Shanghai Futures Exchange also closed higher at Yuan 3,720/t when the daytime trading session ended on November 11, jumping by a large Yuan 106/t or 3% from the settlement price of November 4.
In response to the rise in domestic HRC prices, some Chinese mills lifted their export prices to $530-540/t FOB, while lower offering prices were around $505-510/t FOB, Mysteel Global learned. However, transactions were lukewarm as inquiries from Southeast Asian buyers were only aimed at $480/t FOB.
"In general, China's HRC orders for exports have increased significantly on month in the first half of November, especially those to the Middle East," a Shanghai-based analyst said.
Source:Mysteel Global
