Mysteel believes that there is strong likelihood that Chinese HRC export price is going to improve in November due to firm domestic market prices coupled with rising input cost and possible short supply.

HRC prices in home market have seen little change in the past three weeks from early October level. On Shanghai market, commodity grade 4.5-11.5mm thick and 1500mm wide HRC is being offered at CNY 4160 to CNY 4170 per tonne, 1800mm wide material at CNY 4500 per tonne as compared with CNY 4120 to CNY 4150 per tonne and CNY 4450 to CNY 4500 per tonne on October 8th 2007, the first working day following China's 7 day long National Day Holiday.

Domestic prices are expected to turn strong gradually as there would be less supply when major steel makers choose to arrange maintenances in November. In addition, MySteel believes that producers are pulling together to reduce the availability of HRC, thus leading to better environment for raising EX works prices to offset the rise or the expected increase in raw material cost.

Steel makers have shoot up export offers for commercial 4.5mm to 11.5mm HRC by USD 5 per tonne to USD 585 per tonne on FOB basis citing fewer supplies during repair and maintenance period. A Trader told MySteel that "We are told that HRC tonnages for export are largely reduced and there are fewer activities now. Some e just keep price flat but claim no resource for export now.”

MySteel forecasts that “However, there would not be surge in prices on a short term basis since exports is slowing down. The contracting profit margin over domestic market prices is pressing down the exports. Despite that, current export offers are more connected with home market and steel mills are not willing to export at level lower than that in domestic market. So it probably would edge up little by little among fluctuations.”

(Sourced from MySteel.net)