Chinese hot rolled coil prices slumped last week due to subdued demand. Export prices were falling as well, Kallanish notes.

In Shanghai on Friday afternoon, 5.5x1,500mm Q235 HRC was traded at around CNY 3,990-4,010/tonne ($558-561/t), down CNY 90/t on-week. On the Shanghai Futures Exchange, the May 2024 contract for HRC lost CNY 37/t from Thursday and CNY 135/t on-week to CNY 3,967/t. 

In Wuxi on Friday afternoon, 20x2,000mm Q235B plate was traded at around CNY 4,040-4,060/t, falling CNY 60/t on-week. 

Although the official Chinese New Year holidays will begin from 10 February, spot transactions have almost stopped since last Thursday. Low temperatures and heavy snow and rain pushed many end users in southern China to start holidays earlier than expected.

Several HRC deals were confirmed in export markets last week, with lower prices attracting buyers.

Nearly 15,000 tonnes of SAE 1006 HRC was booked at $615-620/t cfr GCC from a tier-1 Chinese mill, for March load-readiness. Also, around 1,000t was sold at $587/t cfr Vietnam. This booking is heard by a source to have only 30% 2mm material.

Neither Chinese mills nor traders were willing to give firm offers, but were instead feeling out buyers. The market was quiet before the holidays. “Even if a contract is signed, the following process can’t be completed before the holidays,” an exporter comments.

Kallanish assessed 2mm SAE 1006 HRC at $575-580/t fob China on 2 February, down $10/t from a week earlier.

Chinese exporters should work until later this week, depending on company policies, but with markets inactive, most of them are likely to suspend business as soon as they can. Most domestic traders had already left by last Friday.

A large amount of HRC to be exported is backlogged in northern ports because bad weather has affected shipping. "This phenomenon has led to the so-called rise in apparent consumption reflected in HRC inventory data in the past two weeks, but this is not due to any recent explosion of export orders," one Chinese exporter says, with another concurring.