After the previous week’s $7/tonne increase, China's export prices for hot-rolled coil (HRC) gained further strength during the week of August 24-28, with Mysteel assessing the export price of SS400 3mm commercial-grade HRC at North China's Tianjin port on August 28 higher by $2/t on week at $490/t FOB.

The rise was mainly the product of firmer cost support from higher raw materials prices such as those of iron ore and coking coal. This, coupled with the seasonal recovery in restocking demand in major overseas markets like Vietnam, encouraged Chinese steelmakers to raise their offers further, a Shanghai-based ferrous analyst noted.

On August 28, the Mysteel PORTDEX 62% Australian Fines price was assessed at Yuan 705/wmt ($105/wmt) FOT, up Yuan 13/wmt or 1.9% on week, while the national composite spot price for coking coal under Mysteel's assessment had jumped by Yuan 180.8/t or 9.3% on week to Yuan 2120.4/t the same day, both including the 13% VAT.

The firmer cost support had also fueled the recent rally in domestic hot coil prices, as Mysteel Global had reported.

Export offers for SS400/Q235 HRC from Chinese mills last week were around $495-510/t FOB, with major state-owned mills showing greater willingness to firm their offering prices. Actual transaction prices were mainly around $495-500/t FOB, higher by $10/t on week, according to Mysteel's latest market round-up.

In Vietnam, hot coil import prices continued to rebound last week, with offers from Indonesian mills recovering from around $507-516/t CFR Vietnam during August 17-21 to around $525-534/t CFR last week. By August 28, offers for Indonesian SAE1006 3mm HRC were quoted at $534/t CFR Vietnam, up by $18/t on week.

Hot coil export offers from Indian mills and traders also trended higher amid tighter domestic supply and improved market sentiment in India, with SAE1006 3mm hot coils quoted at around $527/t CFR Vietnam on August 28, up by $17/t on week, according to market sources.

A deal involving some 30,000 tonnes of Indonesian SAE1006 HRC was reportedly concluded at around $525/t CFR Vietnam toward the end of the week, which showed that workable price levels in Vietnam had shifted higher from early August when HRC was traded at around $505-510/t CFR.

However, this workable price level remained about $9/t below the Indonesian offers of around $534/t CFR, suggesting that local buyers had yet to fully accept sellers' increases.

Most buyers in Vietnam were still waiting for Hoa Phat Group's new pricing announcement before making their purchasing decisions, local sources suggested. Following the rise in import offers, they predict that Hoa Phat is likely to raise its HRC prices by around VND 300-400/kg, equivalent to $12-15/t, in its upcoming September announcement.

HRC offers from Japanese mills and traders remained flat at $585/t CFR Vietnam. Offers for Chinese Q235B/355B and Malaysian SAE1006 3mm HRC were also unchanged on week at $580-598/t and $615/t CFR Vietnam respectively. 

In Saudi Arabia, HRC import prices also trended higher on week, as disruptions to shipping through the Red Sea reduced available supply and prompted Asian shippers to raise their delivered offers.

However, some Saudi end-user companies reported that finished steel selling prices have fallen below their hot coil substrate costs, severely squeezing profit margins. As a result, they are increasingly inclined to seek alternative specifications or delay purchases rather than accept steadily higher import offers.

Meanwhile on August 28, Mysteel assessed China's export price for SPCC 1.0mm cold-rolled coil at Tianjin port higher by $5/t on week at $547/t FOB.

Source:Mysteel Global