Chinese HRC falls from 19-month high
After hitting a 19-month high, Chinese hot-rolled coil prices began a slow decline last week, despite no significant drop in demand, reports Kallanish.
On the Shanghai Futures Exchange, the most-traded, October 2026 contract for HRC closed at CNY 3,446/tonne ($506/t) on Friday, down CNY 32/t from the prior day and CNY 27/t week-on-week.
The post-May Day holiday positivity lasted for only one more day, on Monday last week. The market began a slow decline on Tuesday, triggered by a drop in coking coal futures. This pleased downstream manufacturers who had previously resisted high prices, but overall market expectations did not deteriorate substantially.
Due to the drag of futures, 5.5x1,500mm Q235B HRC assessed by Kallanish in Shanghai declined by CNY 40/t from a week earlier to CNY 3,480-3,500/t on Friday afternoon.
Fundamentals data as of last Wednesday was still positive. Inventories resumed their decline, while weekly apparent demand for HRC also increased. The overall situation has basically returned to the level of before Labour Day.
Meanwhile, in Wuxi, 20x2,000mm Q235B plate prices decreased by CNY 20/t to CNY 3,520-3,540/t on Friday.
In the HRC export market, Chinese quotes remained largely unchanged. Leading steel mills maintained their prices within the range of $520-530/t fob China.
However, limited smaller manufacturers and traders were still able to offer prices at around $510/t, subject to product, including Q195 and SS400 HRC.
By comparison, after announcing an increase for June sales, offers given by Taiwan’s China Steel Corporation (CSC) are set to reach nearly $667/t. “This represents the highest level in East Asia now,” a Taiwanese source said Friday.
Kallanish assessed 2mm SAE 1006 HRC at $520-530/t fob China on 15 May, up $5/t from a week earlier. This increase is not due to last week's price trend, but rather to the further reduction in likelihood of low-priced transactions.
CNY appreciated against the dollar throughout last week, reaching 6.78 on Thursday, a new record since February 2023. However, CNY then depreciated sharply on Friday, wiping out the gains of the previous four days. Therefore, the impact of exchange rates on HRC export prices was minimal last week.
From: Kallanish
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