Most global hot rolled coil (HRC) suppliers have continued to keep their offers stable this week. However, the HRC market globally has remained positive rather than negative, especially in Europe, where local and import HRC prices have finally started to show signs of a recovery. A few outlets have been rather silent due to the post-holiday period in Turkey and the Middle East. Meanwhile, uncertainties and price fluctuations have continued in China amid turbulence in futures prices, affecting other Asian suppliers’ business.
European HRC producers have been more positive in terms of their offers for domestic buyers given the lower interest in imported coils due to long lead times, along with the narrower gap between local and import quotes. In particular, this week, Italian mills have made attempts to increase their offers for HRC to €680-700/mt ex-works, up by €20/mt week on week, mainly for September deliveries. However, the tradable price is still estimated at €650/mt ex-works, given several deals reported to have been done at this level this week. Meanwhile, producers in northern Europe have been offering their materials at around €700-710/mt ex-works for September and October deliveries. At the same time, according to sources, the anticipation of scheduled summer maintenance works and unexpected production issues in France and Germany, in particular, may provide additional support for HRC prices in the region to recover. Meanwhile, import HRC offers have been heard at €610-645/mt CFR southern Europe, depending on the supplier, compared to €610-630/mt CFR last week. Several deals have been reported for ex-India HRC at €600-610/mt CFR Spain this week, with most offers coming at €610-615/mt CFR, while offers for ex-Japan and ex-Taiwan have been voiced at around €615-625/mt CFR, up by €5-10/mt week on week. Offers from South Korea have been heard in Spain at as high as €645/mt CFR, up by €15/mt week on week. Furthermore, import offers for ex-Asia HRC in northern Europe have been heard at €620-650/mt CFR, versus €620-630/mt CFR last week. However, according to sources, workable prices have been at €610-620/mt CFR, with a deal for around 10,000 mt of ex-India HRC reported to have been signed at $665/mt CFR Antwerp, or €612/mt CFR.
Chinese HRC suppliers have kept their export offers mainly stable this week, with only some slight downward corrections by a number of traders who have been trying to attract buyers. In particular, export offers for boron-added SS400 HRC given by major Chinese mills are at $555-565/mt FOB for mainly September shipment, the same as last week. At the same time, the tradable level for ex-China SS400 HRC has been estimated at $535-545/mt FOB for August shipment, down by $5/mt week on week, with the lower end of the range corresponding to ex-China offers in Vietnam. However, by the end of the week, market insiders have started to actively discuss the recent drop in futures HRC prices by around $12/mt on Friday given the lack of a specific plan for a massive economic stimulus in China. Domestic HRC prices in China are at RMB 3,900-4,020/mt ($539-556/mt) ex-warehouse on July 7, with the average price level RMB 10/mt ($1.38/mt) higher compared to June 30, but RMB 5/mt ($0.69/mt) lower as compared to June 6, according to SteelOrbis’ data.
In Vietnam, following several deals for ex-China SS400 HRC at $540/mt CFR for around 10,000 mt last week, this week market insiders have reported new deals for around 5,000 mt in total at $542-545/mt CFR. However, by the end of the week, new offers from traders have dropped slightly again to $540/mt CFR given worse sentiments in the Chinese futures HRC market. Meanwhile, offers for SAE1006 HRC from China have been reported at as high as $585-590/mt CFR from steel mills, though traders have been offering the materials at $575-580/mt CFR, with bids heard at $570/mt CFR level. At the same time, this week the second largest HRC producer in Vietnam, Hoa Phat Group, announced its new local prices for HRC for shipments in August and September at around $580/mt CFR. According to sources, this week “Hoa Phat has collected 99 percent of domestic orders for August shipment and has stopped offering. Only export allocation is left”. The SteelOrbis reference price for imported SAE1006 HRC has remained at $575/mt CFR, the same as last week, based on the most attractive offers coming from Chinese traders.
Ex-India HRC prices have largely been kept at $575-605/mt FOB, versus $580-600/mt FOB last week, with the lower end of the range corresponding to the deal price in the Middle East and with the higher end in Europe. There was renewed optimism as, even though small in terms of tonnages, a few deals were successfully signed by a number of buyers. In particular, according to sources, a deal for around 10,000 mt is reported to have been signed at $665/mt CFR Antwerp, which translates to around $605/mt FOB. Besides, market insiders have reported a deal from a western India-based mill for delivery to the UAE at $610/mt CFR, or around $575/mt FOB and slightly below, while another deal for ex-India HRC reportedly signed at $595/mt CFR with Turkish buyers has been circulating in the market. According to sources, there are some positives emerging in overseas markets and prices may have bottomed out. Besides, import interest is better and the Gulf region should be livelier as business activity picks up after the holidays of last week.
Following the holiday period, Turkey’s HRC market has not witnessed any drastic change in either business activity or pricing. The local mills have maintained their domestic offers at $680-700/mt ex-works mainly for August-September deliveries, while the earlier voiced levels of $705-710/mt ex-works have been withdrawn from the market. Import scrap prices have not dropped and import offers are not aggressive or numerous, which is the main reason for the relative stabilization of HRC prices in Turkey, despite weak exports. HRC export prices are now at $640-650/mt FOB and there may be some opportunity to sell to the EU soon due to the price rebound. In the import segment in Turkey, China started the week with $590-600/mt CFR levels for Q195 HRC of 3 mm and higher, but later the offers softened to $585-595/mt CFR. A small HRC lot from India has been sold to Turkey at $592/mt CFR, but some other suppliers are still aiming for close to $615-620/mt CFR, though they are not so keen to sell. By the end of the week, there has been talk about a 15,000 mt purchase of HRC from Egypt by a Turkish re-roller at $655-660/mt CFR. The price is considered to be on the high side, though it is a duty-free origin, while China, for example, is subject to 13 percent duty. In addition, according to sources, the cargo includes some high grades of HRC for which Egypt has much lower extras compared to Turkish mills.
In the UAE, business activities that had been expected to revive have remained slow following the holiday period, but market participants continue to be optimistic that a recovery will eventually occur. Import offers, on the other hand, have been fairly stable since the holiday break. According to reports, 10,000 mt were sold by China at $580-585/mt CFR, even though widespread offers of $590-600/mt CFR from Chinese suppliers to the UAE for July and August deliveries have been reported. Meanwhile, Indian suppliers have remained silent on offers due to uncertainties and low trading activity. Even so, this week the market heard a rumor that an Indian mill sold some lots to the UAE for around $610/mt CFR, but, according to a larger Indian supplier, the last booking was made three weeks ago and no trading activities have been heard since. Similar to Indian suppliers, South Korea has chosen to refrain from submitting offers because of failed efforts to reach higher pricing in the UAE market, whereas ex-Japan offers have been made to the UAE at about $590-600/mt CFR.