Chinese hot rolled coil prices fell across the board this week on weak demand amid unfulfilled expectations on macro stimulus, Kallanish notes.

In Shanghai on Friday afternoon, 5.5x1,500mm Q235 HRC was traded at around CNY 3,860-3,880/tonne ($536-539/t), down CNY 60/t from a week earlier. On the Shanghai Futures Exchange, the most-traded October 2023 contract for HRC lost CNY 50/t from Tuesday and CNY 113/t from last Friday to CNY 3,786/t. Chinese steel futures trading was suspended from Thursday due to the Dragon Boat Festival holiday and will resume next Monday morning.

At the beginning of this week, spot traders tried to hike offers but transaction volumes then weakened in response. After declines on Tuesday and Wednesday, overall performance improved, but futures players dragged down prices, closing positions to avoid any risks during the holidays.

In export markets, offers also declined at first, though some climbed a little despite low demand. The most competitive offers for Chinese Q195 and SAE 1006 HRC were at $537-540/t and $560/t fob China respectively, about $10/t lower than last Friday.

“It is an uncomfortable bid,” an exporter in Hangzhou said when he heard bids at $553/t cfr Vietnam. “I’ll sell SAE 1006 HRC if it is $560/t”.

Another exporter in Tangshan believes transaction prices for SAE 1006 HRC are at about $565/t cfr Vietnam. “It is higher than yesterday,” he added on Wednesday afternoon.

Kallanish assessed 2mm SAE 1006 HRC at $555-565/t fob China on Wednesday, remaining steady from the prior week.

The depreciation of the CNY is also putting downward pressure on Chinese export values. At unchanged Chinese HRC values in CNY terms, buyers would have seen dollar-denominated prices fall $4-5/t in the first three days of this week.