Asian hot-rolled coil prices fell sharply March. 4 due to lower offers, amid escalating trade tensions between China and the US ahead of the Two Sessions meeting March. 5.
Platts assessed SS400 HRC of 3 mm thickness down $2 on the day at $461/mt FOB China March 3. The same grade of coil was down $1 at $469/mt CFR Southeast Asia over the
same period.
Export offers fell to $463-$485/mt FOB China, down $2/mt on the day, with some Tangshan-based mills heard to have slashed offers by more than $5/mt. Bids remained sparse as most market participants were still in wait-and-see mode.
Sources said Chinese ferrous futures fell after the US added a 10% tariff on all imports from China, on top of a 10% levy on Chinese goods put into effect a month ago.
China then retaliated, imposing an additional 10%-15% tariff on some US goods on March 4. Sources said this heightened tension between the two powerhouses dampened sentiment, which was already weak.
Separately, there was market chatter that the Chinese authorities were strengthening measures to control air pollution, and that independent hot rolling lines in Tangshan would be shut temporarily, but this could not be verified by publication time.
It was also said that there will be moderate to severe pollution between March 7 and 11 and that mills in Tangshan must be ready to cut 30% of its production to reduce emissions.
“The impact of this news is not significant, since the whole market is in the wait-and-see mode,” said a trader source in China.
A China-based mill source agreed, adding that there has yet to be any shutdowns heard so far.
The most actively traded May contract on the Shanghai Futures Exchange closed at Yuan 3,398/mt March. 3, down Yuan14/mt, or 0.4% on the day.
Platts assessed the spot price of Q235B 5.75 mm HRC at Yuan 3,400/mt ($467/mt) ex-stock Shanghai, including value-added tax, down Yuan 10/mt on the day.
In Vietnam, Chinese offers for 2,000mm wide coils stood at $475-$480/mt CFR, down $3/mt on the day. There were no offers reported for the regular width coils due to the temporary antidumping duty imposed on such coils from China.
“Sellers are adapting quickly with the target price at around $5/mt lower than offer levels,” a Vietnam-based trader said.
Offers for Chinese SAE1006 coils that were 3 mm thick and 2 meters wide were heard at $490/mt CFR Vietnam, rangebound on the day.
Meanwhile, offers for Japanese coils were heard at $520- 530/mt CFR Vietnam, though some trader sources said official offers were higher, adding that these prices were too high for Vietnamese buyers.
Indonesian coils were offered at $510/mt CFR Vietnam, which sources noted were more competitive than what domestic mills were offering.
Platts assessed SAE1006 HRC $1 down at $482/mt FOB China on March 3. Platts assessed the same coil grade unchanged over the same period at $493/mt CFR Southeast Asia. Platts is part of S&P Global Commodity Insights.
