Chinese HRC sellers have lowered export offers following declining domestic steel and iron ore import prices. Most steel mills are focusing on generating cash flows ahead of the Golden Week national holidays starting Oct 1. Transactions are thus likely to remain slow for the first week of October.
Davis Index learned from industry sources that Chinese finished steel futures declined further this week weighing down steel prices. Offers for Chinese HRC (SS400, 3-12 mm) were at $515-525/mt fob China, down by $5/mt from the prior week. Sentiment in the domestic market also weakened amid a fall HRC futures, resulting in the lowered offers.
Chinese sellers are likely to export more volumes at lower prices since inventories at hand remain high amid ramped-up production.
Vietnamese buyers turn active for purchases
Chinese traders have resumed exports to Vietnamese mills with deals for SS400 coils materializing at $510-515/mt cfr Vietnam last week. Deals for HRC (SS400, 3-12 mm) were heard at $507-510/mt cfr Vietnam. Indian mills were targeting $530/mt cfr Vietnam, but no trades materialized at these prices.
Pressure on the Chinese market has spilled over to affect the supplier market in CIS despite strong European demand. A possibility of a second COVID-19 wave and renewed restrictions in the European countries have dampened sentiment in these markets. A few participants also believe that after the Golden Week holidays, decreased inventories and export resumption could boost prices.