FOCUS: Why HRC is China's darling commodity of 2020

A month ago, Eric, a steel importer based in eastern China, was pricing hot-rolled coil imports 20-30 yuan ($3-4) per tonne below the market average to secure orders.

Now, he is clearing his stock at prices that are “higher than expected.”
“This is thanks to rising domestic demand, which saved scores of importers from losing money,” he said.
Rough start
In the first seven months of 2020, China imported over 3.3 million tonnes of HRC, most of which consisted of rerolling grades, according to Chinese customs data.
That is a 128% increase from 1.45 million tonnes a year earlier.
The higher supply led to rerolling-grade HRC prices falling 10-30 yuan per tonne below those for mainstream grades in mid-August.
On August 14, rerolling-grade HRC in Shanghai was priced at 4,030 yuan per tonne, while mainstream grades were trading at 4,040-4,060 yuan per tonne.
Under typical circumstances, rerolling grades fetch around 20 yuan per tonne more than mainstream grades due to their higher production costs.

“As such, it is understandable for trader to import...

Published

Miranda Song

September 03, 2020

09:19 GMT

Shanghai