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China's domestic trade: hot rolling demand is still acceptable, and market prices are still slightly stronger
This week, the decline in market inventory has narrowed, while the southern region has shown a slowing trend of inventory reduction with the increase in arrival volume. With fewer resources in the hands of merchants, the expected consumption after the year is still acceptable, leading to a slight change in market mentality and a weakening of the idea of reducing prices and shipping to avoid risks. Overall, the market is still in a cautious state, but under little pressure, as well as the expected rebound in terminal restocking, it provides some support for the market price. From the perspective of New Year's Day onwards, the supply-demand contradiction may be reflected, and the price difference between the north and south may slightly widen. The southward momentum of Beicai may be reflected, and the supply-demand contradiction may show a positive and slight accumulation process.
Chinese exports
This week, the export price of general coils has remained stable, with mainstream prices ranging from 570-580 US dollars per ton FOB. There is some room for negotiation based on the actual situation of orders, and some SGC490 steel mills are starting to accept export orders for the March shipping schedule next year. According to feedback from a Southeast Asian merchant, as the end of the year approaches and there are more holidays, although the demand for steel in Southeast Asia has been affected to some extent, the price advantage of Chinese hot coils is still significant, and there will still be rigid procurement demand. At the beginning of December, Vietnam's large leading steel mills and Fa Steel raised the SAE1006/SS400 hot coils delivered locally in March next year to USD 600/t CIF, and the hot coils exported from Japan, South Korea and Taiwan, China to Southeast Asia were all above USD 600/t CFR.
Southeast Asia
This week, the Southeast Asian hot coil market has strong bullish sentiment, with good demand for pre holiday hoarding. The mainstream quotation for Q235B hot coil has increased to $575-580 per ton of CFR, with an inquiry of $575 per ton of CFR. The quotation for Q195 hot coil has significantly increased to $575 per ton of CFR, further narrowing the price difference with Q235B. In terms of cold rolling base materials, the mainstream quotation for SAE1006 hot coils in China is 610 US dollars per ton of CFR, and the available transaction price is 600 US dollars per ton of CFR, with 50% of the resource thickness being 2 millimeters.
It is expected that Hefa will release price adjustment information in early January, and sources have indicated that the price may be around $630 per ton CIF, higher than similar resources in China. However, due to the good export situation of coated SGC490 steel in Vietnam, most of the billet adjustment factories have sold out their orders in March, and it is expected that they will have a good acceptance of the increased quotation.
India
Due to the upcoming New Year holiday and buyers waiting for the leading steel mills to announce price adjustments in early January, demand for hot coils in India has stagnated, and the market has passively accumulated inventory, leading to traders starting to lower prices and sell. On Friday, the local spot price of hot coils was 54500 rupees/ton (655 US dollars/ton) EXW, a decrease of 500 rupees/ton compared to the previous week. It is expected that the market activity will improve in the first week of January.
In terms of imports, the mainstream quotation for Chinese hot coils is 595-600 USD/ton CFR, which is about 20 USD/ton lower than the inquiry. In terms of exports, although the EU domestic trade prices are relatively high, due to the Christmas holiday this week and the weak trading atmosphere in the market, India's export quotation remains at $695-700/ton CFR SGC490 steel.
