Chinese hot rolled coil markets fell silent last week as traders and end users began their Lunar New Year holidays. Export offers however kept climbing as the Chinese domestic macroeconomic outlook is positive and quotes from other origins also remained strong, Kallanish notes.

In Shanghai on Friday afternoon, 5.5x1,500mm Q235 HRC was traded at around CNY 4,210-4,230/tonne ($621-624/t), remaining unchanged week-on-week. On the Shanghai Futures Exchange, meanwhile, the most-traded May 2023 contract for HRC lost CNY 23/t from Thursday and CNY 1/t on-week to CNY 4,201/t.

The domestic spot market was basically at a standstill last week, meaning those spot traders who were operating had little incentive to make frequent price changes. There was ultimately no negative impact from Covid or December data news, so the market remained stable.

Chinese HRC export transactions are also not expected to pick up in the short term. However, offers ran up because various stimulus policy announcements have painted a more optimistic picture for the coming months.

Chinese HRC allocation for February shipment has been almost sold out, and exporters were bullish on March sales. This also helped offers to rise despite a lack of deals.

Big mills offered SS400 HRC at $645-650/t fob China before breaking for the holiday, and over $660/t fob for SAE 1006 HRC. These quotes were negotiable and typically higher than the most competitive levels in export markets.

“I don't rule out the possibility that some traders raised their offers too much. Maybe they want to test the market reaction and make adjustments after the Chinese New Year holidays,” an exporter in eastern China commented on Friday.

Kallanish assessed 2mm SAE 1006 HRC at $650-660/t fob China on 20 January, up $20/t from the prior week.