Asian hot-rolled coil market remained sluggish June 10, due to low buying indications amid rainy season in spite of further gains in Chinese market.
S&P Global Platts assessed SS400 HRC 3 mm thick at $925/mt FOB China, unchanged on the day. On a CFR Southeast Asia basis, the same grade of coil was assessed at $899/mt, stable on the day.
Although one Chinese mill increased offer by $10/mt to chase higher domestic market, most mills held offers stable in light of the weak buying interest and wide offer-bid spread.
Bidding level from South Korean buyers was reported at about $910-$915/mt FOB. “It seems price will be down. "Almost no import because everyone is scared to stock HRC in rainy season in July and August with high price,” said a South Korea-based trader.
Platts assessed SAE1006 HRC at $965/mt FOB China, down $5/mt on the day. On a CFR Southeast Asia basis, the same grade of coil was assessed at $960/mt, down $5/mt on the day.
In Vietnam, offering level for rerolling grade SAE HRC were as low as $950/mt CFR for end-June to early-July shipment. Buying activity was quiet, in addition to low buying interest, most Vietnamese buyers also insist sellers to cover all the export duty risks, market sources said. Local producer Formosa Ha Tinh Steel is expected to announce new offers around June 11.
Meanwhile, pipe makers were not interested to book, as offering level for HR strip was only about $880-$890/mt CFR for June to early-July shipment. Buyers were mainly waiting for FHS and Hoa Phat offers, said a Vietnam-based trader.
In South Korea, buying indication for SAE HRC was also below $950/mt CFR, due to sluggish demand from downstream sectors like auto and home appliance, although demand for construction steel is said good. "Profit margins for local auto sheet and home appliance sheet is not good, as these producers usually sign long-period contracts with end-users," aid a South Korean buyer. "And prices have been rising too much, making them hard to accept."
July-August are non-peak season, as buyers are uncertain about market outlook in September, so they prefer to wait at the sidelines, he added.
In Shanghai, the spot price of Q235 5.5 mm HRC was assessed at Yuan 5,580/mt ($873/mt) ex-stock, including value added tax, up Yuan 30/mt on the day. Spot market remained fluctuating with futures, and this situation would continue in the new term, said a Shanghai trader. On the Shanghai Futures Exchange, the most actively traded October contract closed at Yuan 5,448/mt, up Yuan 82/mt, or 1.5%, over the same period.
