August 29, 2008

Chinese HR export prices urge by USD 20 per tonne

Chinese export offer for hot rolled steel coil has moved up again in the first week of April. Though the rise is likely to continue in the short term, there is strong likelihood that price is going to witness adjustment in the near future.

On Shanghai market, commercial HRC in 4.5mm to 11.5mm thickness and 1500mm width was being quoted CNY 5350 per tonne up by CNY 50 per tonne to CNY 80 per tonne from last Friday and 1800mm wide material has jumped by CNY 70 per tonne to CNY 5650 per tonne.

Now prevailing HRC offers for June shipment are at USD 875 per tonne USD 880 per tonne non FOB basis up by USD 15 to USD 20 than late March. It is also heard that certain tier one steel producer has shoot up quotation to around USD 890 per tonne on FOB basis.

Views are mixed on whether export price hike will stick for the next 4 weeks to 6 weeks. Some traders have already made position at USD 860 per tonne to USD 870 per tonne and some just are employing a wait and see attitude. Those who bet a further rise plan to sell at USD 930 per tonne to USD 950 per tonne on FOB basis. However many others are afraid that there would be a sudden collapse following such a surge.

Accordingly, export quotations for commodity grade HRC may rise to USD 950 per tonne on FOB basis at most in April and then start to drop. Mysteel conjectures that it would go back to around USD 700 per tonne even if it approaches USD 1000 per tonne on FOB basis in next three months.