Following China’s Golden Week holiday, domestic demand for hot rolled coil is still recovering and the market is confident over strong performance in October, Kallanish notes.

In Shanghai on Friday afternoon, 5.5x1,500mm Q235 HRC was traded at around CNY 5,870-5,890/tonne ($910-914/t), up CNY 110/t from 30 September, the last pre-holiday working day. On the Shanghai Futures Exchange, meanwhile, the January 2022 contract for HRC futures closed CNY 100/t higher than the previous trading day at CNY 5,813/t.

In addition to demand, most mills’ inability to resume production unrestricted has also supported HRC prices. The sudden rainstorm in northern China has caused disruptions to supply of raw materials, such as coking coal, supporting steel costs at high levels.

Export markets meanwhile remained in a lull due to higher Chinese prices, which have plagued Chinese suppliers for months. No significant changes were seen during the holiday.

For SAE 1006 HRC, Indian-origin offers at below $900/t cfr Vietnam make China’s lowest offers of approximately $940/t fob China uncompetitive. “There is no need for us to talk about whether China can export HRC this year,” a trader says.

Kallanish assessed 2mm SAE1006 HRC unmoved at $905-915/t fob China on Friday.