The global hot rolled coil (HRC) market has maintained its overall positive sentiment since last week. Most producers across the world have been either increasing their prices or quite easily maintaining them at the previously achieved high levels, supported by generally sustainable demand. However, in some markets, like Turkey, trade has been silent this week due to sufficient stocks and the cautious mood in the scrap segment. The GCC is also not in a rush to accept higher import HRC offers, given the approach of Ramadan. In the EU, higher offers are targeted for June, while import offers have continued climbing.
European domestic HRC prices have remained quite firm this week and even increased in some cases, while import offers have indicated an upturn, supported by decent demand and the rather positive global market outlook. In the southern region of Europe, the Italian mills have maintained their offers for May rolling at €800-820/mt ex-works, but have increased the indications for June to €830-850/mt ex-works. Their colleagues from the north of the EU have raised their offers by €10-20/mt to €850-860/mt ex-works. In the import segment, the prices in southern Europe have increased by €10-15/mt to a general range of €770-810/mt CFR. Particularly, India has increased offers to Spain and Italy to €785-790/mt and €780/mt CFR respectively. A 20,00 mt HRC cargo from India is reported to have been booked to the northern part of the EU at $830/mt CFR, netting back to around €782/mt CFR. A few bookings have also been reported by Spanish buyers at €785/mt CFR this week for Japanese and South Korean origins, with a further offer rise up to €800/mt CFR. The latest indications from Vietnam correspond to around €770/mt CFR, while ex-Egypt and ex-Turkey offers have been reported at €810/mt CFR Spain and €800/mt CFR Italy, respectively.
Domestic HRC prices in Turkey have remained stable for the third consequent week, although business activity has gone silent. Most of the large buyers had restocked earlier, mainly in the domestic market and from China, and are now in wait-and-see stance. One reason is an issue with export licenses, as evaluated by many re-rollers, given the recent slowness of exports. Another reason is that import scrap sentiment has weakened by the end of the week, making some buyers expect a downward trend in the HRC sector as well. However, domestic HRC prices in Turkey have remained stable at around $850-870/mt ex-works in the majority of offers. Most producers are in the market to sell for June delivery and so are not under pressure to sell at discounts, at least for now. In the import segment, a larger number of offers has been seen this week. The highest ones have been coming from India and Egypt - at $820-830/mt CFR and $830-840/mt CFR. These were followed by South Korea at $790-800/mt CFR and Japan and Vietnam at $760-780/mt CFR. Russian mills are not in the market yet. One of them is sold out for April production, while another reported its export allocation will be limited and that the slab trade is preferred for now.
In Vietnam, the local HRC producer Formosa has announced a $32/mt price increase, supported by the bullish sentiment in the region, but some of the market sources are not yet optimistic regarding the supplier’s new offers. They were settled at $727/mt CFR for non-skin passed SAE1006 and SS400 HRC, while the skin passed SAE1006 HRC offer has been settled at $732/mt CFR. In the import segment, ex-China SAE1006 offers have settled at $690-710/mt CFR, while SS400 material has been on offer at $670-675/mt CFR, up $10-15/mt over the past week. Offers from India have been indicative at $735/mt CFR for SAE1006 grade, while prices from Japan and Taiwan have been evaluated by buyers at $750/mt CFR, in line with the previous week.
Ex-India HRC prices have increased over the past week as fixed in some deals, and optimism has remained high among sellers readying to finalize higher export allocations and submit higher offers for May-June shipments. The SteelOrbis reference price for ex-India SAE1006 2 mm HRC stands at $715-760/mt FOB, with the midpoint at $737.5/mt FOB, up by $12.5/mt on average over the past week from $700-750/mt FOB earlier. Among the few trades reported over the past week is one for a tonnage of 10,000 mt booked by a MENA-based buyer from an eastern India-based integrated mill at $715/mt FOB, while a Maharashtra-based seller confirmed a trade for 15,000 mt to an undisclosed buyer at $728/mt FOB. In addition, around 20,000 mt of ex-India coils changed hands to Europe at $830/mt CFR, which translates to $760/mt FOB, given the higher freight compared to that for Italy. Previous offers from India were at $810-820/mt CFR in early March, but now Indian mills’ offers are at $830-840/mt CFR. Sellers are targeting ex-India prices at levels of $780-800/mt FOB for late May-June shipments.
HRC export offers from China have been pushed up by $10/mt over the past week to $680-690/mt FOB for SS400 grade for May-June shipments. Rare mills are still reported to be content to deal at $665/mt FOB, while some are already aiming to sell at $700/mt FOB. The key reason for the upturn of export prices is the continuing rebound seen in domestic and the futures markets in China amid improved demand from downstream users and declining production. In addition, the general mood in the global HRC market remains bullish, supporting the positive sentiment among Chinese mills.
Chinese traders have decided to follow the uptrend and their tradable level for SS400 has increased by $15/mt over the past week to $655-675/mt FOB. Buyers from Vietnam and Pakistan have reported offers at $670-675/mt and $700/mt CFR, respectively, while the same countries indicated SAE1006 offers from China at $690-710/mt and $725/mt CFR. In the GCC region, China’s SS400 offers have stood at $720-730/mt CFR, while in Turkey the latest offers for SAE1006 have been set at $730-740/mt CFR, following last week’s deals at around $722-725/mt CFR. Domestic HRC prices in China are at RMB 4,450-4,520/mt ($646-656/mt) ex-warehouse on March 17, with the average price RMB 60/mt ($15.5/mt) higher compared to March 9.
In the UAE, there has been minimal interest in importing HRC due to the sluggish local business activity. Nevertheless, import offers, particularly from China, have gradually increased. According to sources, offers for SS400 grade HRC have risen by $10/mt to $720-730/mt CFR for April shipment. In the meantime, India's HRC offers for April shipment are unchanged from last week's $750/mt CFR. Also, South Korea and Indonesia have made the same decision as India to maintain their offers at $800/mt CFR for May-June shipments and $785/mt CFR, respectively.