Asia HRC rises on China sentiment; market direction unclear

09 June 2022
Asia HRC rises on China sentiment; market direction unclear

          Sentiment turned positive in Asian hot-rolled coil market June 8 after a volatile week, as Chinese domestic and futures prices rose even though buyers in Southeast Asia remained cautious.

          Platts assessed SS400 HRC 3 mm thick at $748/mt FOB China, up $2/mt on the day, according to data from S&P Global Commodity Insights. On a CFR Southeast Asia basis, the same grade of coil was assessed up $3/mt at $845/mt.

          Separately, SAE1006 HRC was assessed at $766/mt FOB China, up $1/mt on the day. On a CFR Southeast Asia basis, the same grade of coil was assessed at $756/mt, up $1/mt over the same period.

          Offer for SS400 HRC for 3-12 mm coils stood at $770/mt FOB China for August shipment by several Chinese mills, depending on port of loading. An offer for 3.5-12 mm coils at $745/mt FOB China was not considered, since the thickness did not match Platts specification.

          News of further support packages from the government, at the same time, propped up market sentiment on the futures as well as Chinese domestic markets.

          The Chinese government approved the new urbanization implementation plan during the 14th Five-Year Plan period (2021-25) submitted by the National Development and Reform Commission, or NDRC, according to a circular released on June 7, 2022, on the State Council website. Market participants expected further support measures that could provide solace to the market.

          Meanwhile, GDP growth in China is projected to slow to 4.3% in 2022, the World Bank said in a report June 8, marking a steep 0.8 percentage-point drop from the December forecast.

          In Shanghai, the Q235 5.5 mm HRC spot price was assessed at Yuan 4,880/mt ($729.76/mt) ex-stock, including value-added tax, up Yuan 35/mt on the day. On the Shanghai Futures Exchange, the most actively traded October 2022 contract closed at Yuan 4,868/mt, up Yuan 58/mt on the day.

          In Vietnam, demand continued to remain sluggish even though alloyed HRC offers from a major Indian mill emerged at $775/mt for July shipment, even as bids ranged between $740-$750/mt. According to a few traders, Indian mills could likely conclude at $750/mt in the near future.

          “Buyers are reluctant to buy at any level today. Heard rumors of $715-$720/mt CFR Vietnam being the expectation,” a Mumbai-based exporter said.


Source : Steel Business Briefing

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