Chinese hot rolled coil prices fell further last week as inventories picked up. Lower prices were a boon to exporters, which are starting to see volumes pick up as they regain competitiveness, Kallanish notes.

In Shanghai on Friday afternoon, 5.5x1,500mm Q235 HRC was trading at CNY 4,220-4,230/tonne ($635-637/t), down CNY 55/t week-on-week despite a slight pick-up from Thursday. On the Shanghai Futures Exchange the October HRC contract closed down CNY 1/t over the day and CNY 75/t over the week at CNY 3,851/t.

Although some traders still reported some sizes out of stock, commodity grade material was plentiful. There was also material available from a growing number of mills, some of which had been difficult to source in previous weeks.

Buying levels meanwhile had noticeably declined, although traders willing to give good discounts were still able to sell decent volumes. Traders hope that the slight uptick in prices on Friday will trigger another round of buying early next week to sustain prices. They still see demand fading further into the summer however.

On export market a combination of lower domestic prices and the weaker CNY has made Chinese material competitive again. A handful of bookings were heard during the week, and export traders hope domestic prices can fall further so they can export at better margins. Chinese mills were heard offering as low as $590-593/t fob for SAE1006. Kallanish assessed 2mm SAE1006 HRC at $590-593/t fob China.