Rising Demand Leads to Rising Asian HRC Prices

On the Shanghai Futures Exchange, the HRC contract in January 2021 closed RMB 17 per ton higher than Thursday, and RMB 56 per ton higher over the week to 3920 RMB per ton. During the week, it continued to rise and returned to early September levels.

Since Monday, the market has been driven by strong demand and declining inventories amid end-user interest in restocking before winter. Improvements in construction activities resulted in a drop in steel inventories of more than 1 million tonnes for two consecutive weeks. With the departure of coke plants in various provinces, the rise in coke prices also quickly spread to HRC.

However, higher prices may affect the level of purchases in the coming days. “While high prices are not affecting buyers' interest right now, the pressure of such high prices could soon stop buying them if prices don't fall,” the seller says to HRC.

The export markets also showed an upward trend. The supply began to rise on Wednesday and peaked last Friday. Kallanish has priced the 2mm SAE 1006 HRC with a $ 16 price increase per week at $ 528-533 per tonne in China. South Korean buyers have begun accepting Chinese origin SAE 1006 HRC at $ 540 per tonne cfr since last Friday.

Before the price hike, MMK was selling SAE 1006 HRC at $ 518-510 per ton in Vietnam for February delivery and offering at $ 525 per ton in Vietnam. The delivery time is about a month later than other suppliers.

Around last Monday, Rizhao sold 20,000 tonnes of SAE 1006 HRC at $ 528 per tonne in Vietnam for January shipments, which Hoa Sen and Kim Quoc jointly bought. Sensing the rise in prices, Rizhao Steel quickly raised its bids from $ 525 per tonne to $ 545 per tonne in Vietnam for January delivery last Friday.

Hyundai on Friday raised SAE 1006 HRC bids to $ 550 per tonne in Vietnam, as did Nippon Steel and JSW Steel. Benxi, however, has set its new offer at $ 545 per tonne in Vietnam, which is on par with Rizhao Steel.

Sources in China and Vietnam confirmed that Baosteel's 2mm SAE 1006 HRC was ordered Friday at $ 553 per tonne.

On Friday, Kallanish priced the 2-2.7mm SAE1006 HRC at $ 538-543 per tonne in Vietnam, up $ 13 over the week.