Chinese hot rolled coil futures dropped last week and touched their lowest level since April 2020. Domestic prices thus slumped amid low sentiment, hitting an over seven-year low, Kallanish notes.

In Shanghai on Friday afternoon, 5.5x1,500mm Q235B HRC was traded at around CNY 3,010-3,030/tonne ($425-428/t), down CNY 190/t on-week. On the Shanghai Futures Exchange, the most-traded January 2025 contract for HRC lost CNY 30/t from Thursday and CNY 243/t on-week to CNY 3,096/t.

In Wuxi on Friday afternoon, 20x2,000mm Q235B plate prices were assessed at around CNY 3,190-3,210/t, down CNY 100/t from the prior assessment.

The overall market downturn has greatly dragged on the performance of HRC, causing spot prices in East China to break through a seven-year low. Futures were spared and did not sink below values from April 2020.

HRC fundamentals are worse than those of rebar. Inventory rose on-week along with production. On a year-on-year basis, production is nevertheless lower. However, social inventory is still at its highest level in this period in the past five years. The same is true for steel mill inventory, except for in 2020.

Export rates also dropped because of domestic weakness, but at a slower pace, as the panic in export markets is not as pronounced as in China, where it has been spurred by the plunging futures.

Some bookings of commercial HRC were heard at $450/t cfr Vietnam last week, due for early-October shipments. Chinese exporters tell Kallanish the market is bad.

Another market player in Vietnam heard deals at $453-455/t cfr Vietnam on Thursday, with no more reported on Friday.

In terms of quotes, the lowest ones for 3mm+ Chinese-origin Q235/Q195 HRC fell to only $448-450/t cfr Vietnam on Friday. This is about $25/t lower than the previous Friday. “I offered at $450/t fob China to GCC markets, and this was only the fourth-lowest [of quotes to the GCC],” a Chinese exporter notes. “Everyone is being aggressive.”

For SAE 1006 HRC, a position cargo containing 5,000 tonnes was offered at $460/t cfr Vietnam on Friday, according to a Vietnamese source. But the rate is still higher than the $475/t cfr for 100% 2mm products.

“I offered at just $455/t cfr Vietnam [for mixed thicknesses] today and failed to conclude a deal,” a Hangzhou-based exporter said on Friday.

Kallanish assessed 2mm SAE 1006 HRC at $465-475/t fob China on 6 September, down $12.5/t on-week. SAE grade 2-2.7mm thickness HRC was assessed at $460-465/t cfr Vietnam, a weekly drop of $17.5/t. Both values are at their lowest point in over four years.