While market players have been trying to estimate the positive effects of China canceling its rebates for hot rolled coil (HRC), suppliers of the mentioned origin have come and sold cold rolled coils (CRC) to Turkey and the EU since the tax rebates for this product have not been abolished. The reason is the significantly higher price for CRC in the mentioned markets, which has made the Chinese offers workable. However, some market sources are worried that the CRC prices from China have been lower than the expected and logical levels, which could create some trouble.
According to sources, ex-China CRC has been traded at €1,100/mt CFR to the southern part of the EU and at €1,115-1,120/mt CFR Antwerp. In the meantime, the local ArcelorMittal CRC price has remained at €1,200/mt delivered to customer. “China’s level is good and I believe it will remain workable for a while. They can certainly use this window to get good margins here in the European and Mediterranean region,” a trader told SteelOrbis.
Turkey has preferred to book cold rolled full hard (CRFH) material as a substitute for HRC instead of the commercial CRC quality. As a result, around 45,000 mt of CRFH have been booked since last week at around $950-960/mt CFR. A similar level has been fixed in a deal to Egypt for 10,000 mt, SteelOrbis has learned. Some sources reported the new negotiations were at $970-980/mt CFR, with no deals confirmed.
In the commercial segment, the CRC offers from China are not yet of much interest in Turkey since they are reported at around $1,350/mt CFR. However, the situation may change given the most recent price increase in the local market in Turkey. By the end of the week, Turkish domestic offers have been voiced at $1,400-1,430/mt ex-works for deliveries from July to early September, up by $70/mt over the past week.