Asian hot-rolled coil prices rose Sept. 24 following a series of support measures announced by China’s central bank to shore up economic growth, coupled with preholiday restocking.
Platts assessed SS400 HRC of 3 mm thickness up $7/mt on the day to $456/mt FOB China on Sept. 24. The same grade of coil was up $13/mt at $470/mt CFR Southeast Asia over the same period.
Export offers rose to $459/mt FOB Jingtang earlier in the day and further up to $462/mt in noon, marking a day-on-day increase of $12/mt.
People’s Bank of China Governor Pan Gongsheng said at a press conference Sept. 24 that the central bank would cut the reserve requirement ratio by 50 basis points and the seven-day repo rate by 0.2 percentage point.
He also indicated that a 0.2%-0.25% cut in the loan prime rate is possible, though did not elaborate on whether it was the oneyear or five-year LPR.
There was also talk about interest rate cuts for existing housing loans and lower down payment requirements to stabilize the real estate market.
Chinese ferrous futures rose sharply following the news, but the spot market was mixed as some sources deemed the latest measures to be indications that the authorities would be easing monetary policies instead, rather than decisive actions to resolve the country’s economic crisis.
The most actively-traded January contract on the Shanghai Futures Exchange closed at Yuan 3,300/mt Sept. 24, up Yuan 133/ mt, or 4.2% on the day.
“If the cash flow in the sector doesn’t change, the price trend will not change. This is not a stimulus, it is more of a signal,” a China-based mill source said.
“Those measures seek to inject more liquidity in the market. If the economic fundamentals fail to improve accordingly, the market will have to rely on further interest rate and RRR cuts,” said a southern China-based trader.
The long-term outlook remained bearish, with persistently weak demand and the dip in raw material prices weighing on prices, sources said.
Platts assessed the spot price of Q235B 5.75 mm HRC Sept. 24 at Yuan 3,160/mt ($449/mt) ex-stock Shanghai, including value added tax, up Yuan 60/mt on the day.
In Vietnam, offers for Q235 and Q195 rose to $475/mt CFR levels, up $15/mt from the best offer on Sept. 23. Some traders even withheld offers around noon, expecting prices to surge further.
“It’s the same rhetoric. Prices will come down after they rise sharply,” a Vietnam-based trader said. Some bids for small quantity rose to $470/mt CFR Vietnam in tandem.
SAE1006 offers of 50% 2 mm thickness rose to $495/mt CFR Vietnam.
However, Chinese SAE1006 materials lost their price competitiveness in the Vietnamese market, with attractive offers from Japan and South Korea that come without any fear of retroactive antidumping duties.
Some South Korean SAE1006 was heard dealt at $490/mt CFR Vietnam recently for a lot of 20,000 mt, according to a Vietnam based trader.
Platts assessed SAE1006 HRC $5/mt higher at $475/mt FOB China Sept. 24. Platts assessed the same grade of coil up $6/mt over the same period at $478/mt CFR Southeast Asia.
