Asian hot-rolled coil prices held steady after China cut benchmark lending rates for the first time in seven months, which resulted in the strengthening of the Chinese yuan.
Platts assessed SS400 HRC of 3 mm thickness unchanged day over day at $452/mt FOB China May 20. The same grade of coil was down $1/mt at $468/mt CFR Southeast Asia over the same period.
Export offers held steady at $455-470/mt FOB China, with offers mostly fluctuating due to the exchange rate.
Sources said the appreciation of the Chinese yuan, coupled with China’s central bank move to cut key lending rates by 10 basis points in a bid to boost economic growth, lent some support to prices.
This is the first time since October that the People’s Bank of China lowered its rates.
But bearish sentiment remained amid the lack of improvement in export demand.
The most actively traded October contract on the Shanghai Futures Exchange closed at Yuan 3,202/mt May 20, down Yuan 5/mt, or 0.2% day over day.
Platts assessed the spot price of Q235B 5.75 mm HRC at Yuan 3,290/mt ($456/mt) ex-stock Shanghai May 20, including value added tax, unchanged on the day.
In Southeast Asia, offers for wider width Q235 grade coils slipped to $471-475/mt CFR Vietnam, down $4/mt on the day, with sources saying that persistently weak demand in the spot market continued to put downward pressure on prices.
A Vietnam-based trader said there were also offers for regularwidth material, with minimal spread seen between that and wider-width offers.
The trader added that the tradable price for regular-width coils should hover at $472-473/mt CFR Vietnam, but some disagreed, saying that this price is too high for buyers.
They noted that this tradable price was a one-off as the interested party had likely started discussing after securing an export order. Offers for wider width Q195 were reported at $450/mt CFR Vietnam.
In the SAE1006 grade segment, a leading Indonesian mill’s offer held steady at $510/mt CFR Vietnam.
“Now the mill wants buyers to specify the end usage of the coils so they can focus more on the exact grade required.
Essentially, buyers need to clarify if it’s for rerolling, pipemaking or construction,” a Vietnam-based trader said.
Offers from Japanese mills were also available at $500-510/ mt CFR Vietnam, with the lower end of the range targeted at subsidiary companies.
A Japan-based trader said that Formosa Ha Tinh Steel was heard to have sold over 250,000mt of coils at $505-$506/mt CFR domestic ports, with no major discounts provided to buyers, hence the tradeable price for imports should be at least $5/mt below this.
Additionally, buyers’ price expectations have also fallen, with some rerollers slashing prices of downstream products.
Platts assessed SAE1006 HRC unchanged day over day at $478/mt FOB China May 20. Over the same period, the same grade of coil was unchanged at $500/mt CFR Southeast Asia.
