Chinese domestic hot rolled coil prices thrived last week because of improving demand and hiking futures. This in turn spurred export prices, even though there was no significant improvement in sales activity, Kallanish notes.

In Shanghai on Friday afternoon, 5.5x1,500mm Q235 HRC was traded at around CNY 4,250-4,270/tonne ($618-621/t), up CNY 100/t from a week earlier. On the Shanghai Futures Exchange, meanwhile, the most-traded May 2023 contract for HRC gained CNY 11/t from Thursday and CNY 99/t on-week to CNY 4,240/t.

Improving demand, reflected by falling inventories, boosted Chinese domestic HRC prices last week. Expectations for this coming week are still very bullish.

In export markets, offers began to hike further late last week due to increases in domestic and overseas prices. But the depreciation of the CNY continued to weigh on export offers.

The most competitive SAE 1006 offers given by small mills or some traders climbed to over $665-670/t fob China levels on Friday, $5-10/t higher than a week earlier. However, these comprise only 30% 2mm products.

As for big mills, quotes are about $30-40/t higher. “Our base price for SS400 HRC already touches $675/t fob China,” a mill in northern China said on Friday.

Bids for Chinese SAE 1006 from Vietnamese buyers were meanwhile equivalent to about $640/t fob China. Exporters were not willing to sell at this level, and are waiting for buyers to accept higher prices as they believe increases are inevitable in the short term.

Kallanish assessed 2mm SAE 1006 HRC at $660-670/t fob China on 17 February, up $5/t on-week.

International HRC prices are still likely to grow further as US interest rate hikes slow and European manufacturing recovers. With the instability of overseas supply, there may be new opportunities for Chinese suppliers in Europe, traders hope.

In Vietnam, Chinese HRC export prices have also increased. A recent booking for Chinese Q195 HRC was heard at $638/t cfr, Chinese trading sources reported on Friday. Offers were $620/t cfr earlier in the week. Chinese SAE 1006 HRC offers were also hiked to $670-690/t cfr Vietnam, depending on the Chinese mill. Kallanish assessed imported SAE grade 2-2.7mm thickness HRC at $665-670/t cfr Vietnam, up $2.5 on week.