Although spot prices for iron ore have resumed downward movement and demand stays rather slack, export prices for HR flats are stabilizing in China. Amid an expected increase in HRC quotes due to the removal of partial export VAT rebate, sellers hoping to sell the planned quantities at most attractive prices and continue to offer the material of SS400 grade made to JIS G3101 at $580-590/t fob ports of Shanghai, Tianjin, Zhongshan. Prices for HRC of SAE 1006 grade made to ASTM A635 have also remained unchanged in a week at $605-610/t fob. Besides, Chinese exporters are optimistic also due to the fact that Russian suppliers, including MMK, have made an attempt to lift prices. However, HRC for re-rolling from China are still being quoted to SE Asia at prices $10-15/t higher than similar Russian products, and foreign customers are in no rush to book Chinese material.
In general, market participants forecast export prices for HRC will rise by about $30-40/t as soon as in mid-July, though shipments to foreign buyers will slump. Demand in the region is expected to recover in August at earliest due to the rainfall season.
In their turn, prices for plate have stayed unchanged in the same period at $610-620/t fob but no deals have been reported.
Demand for Chinese CRC is also insufficient. Taking into account the fact that the removal of partial export VAT rebate has had little impact on the segment, exporters so far have no choice but to cut prices further. In particular, prices for CR coils 1 mm and 0.5 mm thick have dipped in a week by $15-20/t and $20/t, to $670-700/t fob and $700-710/t fob, respectively.
Moreover, domestic stockist prices for Chinese flats also continue to move downwards. Stockist prices for HRC and plate have fallen over the week by $15/t and $5-10/t, to $600-625/t at the rate $1 = RMB 6.772 (RMB 4,063-4,233/t) and $635-675/t (RMB 4,300-4,571/t), respectively. All domestic prices are given including 17% VAT, ex-warehouse. At the same time, 1 mm and 0.5 mm CRC are offered to local buyers at $780-790/t (RMB 5,282-5,350/t) and $775-785/t (RMB 5,248-5,316/t), respectively, by $5/t and $15/t lower than a week ago. Market operators do not expect stockist prices to change much until mid-July, while in the second half of the month the prices will probably be sinking due to oversupply in the domestic market amid decreased exports.
Noteworthy, inventories of plate have dropped in a week by 6%, HRC stocks have decreased by 2%, and CRC stocks have remained practically unchanged.
( source: www.metalexpert-group.com )