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Home > Steel News > Market Reports

14OCT 11:32

Chinese HRC edges down on

disappointing demand
253 Views

-2:42

After just a few days of post-holiday excitement,

slow demand has hit market confidence and
dragged Chinese hot rolled coil prices below pre-
holiday levels, Kallanish notes.

In Shanghai on Friday afternoon, 5.5x1,500mm Q235

HRC was traded at around CNY 3,930-3,950/tonne
($546-549/t), down CNY 50/t week-on-week. On
the Shanghai Futures Exchange, meanwhile, the
most-traded, January 2023 contract for
HRC gained CNY 40/t from Thursday but lost CNY
79/t from pre-holiday levels to CNY 3,762/t.

Over the past week, HRC production kept rising

while consumption gained slowly due to sporadic
Covid lockdowns and logistics issues. This, in turn,
resulted in an increase in overall HRC inventories,
impacting post-holiday sentiment.

Unlike the government's focus on real estate and

infrastructure, there has recently been a lack of new
stimulus measures in the downstream industries for
HRC. Despite positive market expectations of a
possible stimulus package to be announced after
the 20th CPC National Congress, starting from 16
October, current demand has dampened
sentiment and prices.

In export markets, big Chinese mills hesitated to

lower offers while spot traders began to sell short.

For SS400 HRC, some traders are targeting

purchases at $550/t cfr Vietnam, but they have
failed to get this level from mills, several Chinese
sources confirmed on Friday.

This sparked some discussions among Southeast

Asian players who thought the price level realistic.
Chinese exporters however considered it as fake
news created by potential buyers to push prices
lower.

In terms of SAE1006 HRC, material from more

Chinese mills was seen in the market, but most
offers are at around $580-600/t cfr Vietnam levels.
A major steelmaker in northern China offered its
SAE1006 HRC at $570/t cfr Vietnam last week,
including 30% of 2mm material.

Kallanish assessed 2mm SAE 1006 HRC at $560-

570/t fob China on 14 October, down $10/t from 30
September.

Kallanish Asia

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