ASEAN HRC import prices continue to rise in January

SINGAPORE February 17 2016 4:35 PM

SINGAPORE (Scrap Register): ASEAN hot rolled coil (HRC) import prices continued to rise in January, as Chinese exporters held firm on increased offers, supported by strong domestic prices, said the Steel Index.

However, rising spot prices in the region attracted steel exporters from other regions, despite waning buying interest with the approach of the Lunar New Year holiday.

Russian mills, in particular, made a strong comeback in the Vietnamese market after almost a two-year hiatus, as rouble weakness helped exporters to lower asking prices to below Chinese and Japanese offer levels. 

According to some Vietnamese traders, over 100kt of Russian origin re-rolling grades of HRC were booked, with prices around US$270-272 a ton CFR Vietnam for small coils (coil weight approx. 10 tonnes) and US$280-282 a ton CFR for large coils (weight: 20 tons). 

Chinese offers remained above $290 a ton CFR during the month and TSI’s ASEAN HRC imports index closed January at $293a ton. Prices flattened in the second half of the month, as market activity slowed. China’s steel purchasing manager’s index (PMI) continued to improve, reaching 46.7 points in January, the highest level in nine months but remained firmly in contraction. 

The main sub-indices, such as production, new orders and purchasing prices all posted significant increases during the month; the new export orders sub-index moved above the 50 -mark threshold, showing an expansion for the first time in five months.

The Chinese government reiterated its aim to cut excess capacity in the steel industry. According to a statement issued after the State Council meeting and chaired by premier Li Keqiang in January, China plans to cut crude steel production capacity by 100-150 million tons, while strictly controlling any newly-added capacity. 

While the State Council did not specify the deadline for these cuts, it pointed out that China has already cut its production capacity of crude steel by more than 90 million tons in the recent years.