The Chinese domestic market for hot rolled coils (HRC) continued its downward trend last week, driven by weak demand. This decline in domestic prices has also affected export prices, while the Vietnamese market has managed to maintain a more stable outlook.

In Shanghai, the price for 5.5×1,500mm Q235B HRC was CNY 3,360-3,380/tonne ($460-463/t) on Friday afternoon, marking a decrease of CNY 40/t from the previous week. On the Shanghai Futures Exchange, the January 2025 HRC contract dropped by CNY 28/t from Thursday and CNY 10/t on a weekly basis, settling at CNY 3,400/t. Despite the steady futures market, the apparent weekly consumption of HRC continued to fall, leading to declining spot prices as traders offered discounts to close deals.

Medium and thick plate prices remained steady, with 20×2,000mm Q235B plate prices in Wuxi holding at CNY 3,510-3,530/t, unchanged from the previous week. While demand for medium and thick plates also remained low, the low inventory levels helped stabilize market sentiment and limited the impact of price drops on the market.

Chinese HRC Exports Hit by Domestic Price Drop

The downward movement in domestic prices has further impacted HRC export prices. Last Friday, a Chinese exporter quoted the lowest price for Q195 HRC at just $471/t CFR Vietnam, a $5/t decrease from the previous week. The most competitive prices for Q195 HRC were around $465/t FOB China. A Shanghai-based exporter commented that even mills in the Middle East could only offer $470/t FOB, further highlighting the price pressures.

SAE 1006 HRC was still being quoted higher at $485-495/t FOB China as of December 27, but the price also showed a slight decrease of $5/t from the previous week. In response to the impending anti-dumping measures that Vietnam plans to implement on Chinese HRC, some rerollers in Vietnam have been seeking alternative sources. At least two rerollers, including a leading one, have ordered around 20,000t of SAE 1006 HRC from Indonesia at $510-515/t CFR, scheduled for February shipment.

A leading Indonesian mill and a newly operational Malaysian mill were offering HRC to Vietnam at $520/t CFR, with most market sources reporting that Vietnamese rerollers have placed orders with the Indonesian mill. One trader in Ho Chi Minh City noted that buyers wanted to test the quality of the HRC and would potentially make more purchases if the quality met expectations. The bookings for Indonesian HRC were made in the week ending December 21.

Limited Trading Activity for Chinese HRC in Vietnam

Despite the competitive offers, Chinese SAE 1006 HRC was being quoted at $500/t CFR, but buyers in Vietnam have shown little interest in making purchases. A Vietnamese trader remarked that there has been little trading activity for Chinese SAE 1006 in recent weeks. The SAE grade 2-2.7mm thickness HRC from China remains priced at $500-510/t CFR Vietnam, with no significant changes in price from the previous week.

Summary:

• Chinese HRC prices have continued to decline due to weak domestic demand.
• Vietnam’s HRC market remains stable, with rerollers seeking alternatives ahead of Vietnam’s anti-dumping measures on Chinese HRC.
• Export prices from China are under pressure, with offers for Q195 HRC as low as $471/t CFR Vietnam.
• Indonesian mills are becoming a more attractive source for Vietnamese rerollers, with prices around $520/t CFR.
• Chinese SAE 1006 HRC remains priced at $500/t CFR, but there is limited trading interest.