Following a steady uptrend since January, ex-Japan HRC offer prices have fallen in April amid the prevailing bearish sentiments in the overseas markets. At the same, though Japanese HRC exporters have managed to avoid huge declines in prices, strong pressure from other suppliers, from China in particular, have exerted significant pressure on ex-Japan HRC prices. Besides, the pressure has been growing not only in Asia, but also in higher-priced markets like the EU, where more and more aggressive ex-Asia HRC offers have been appearing.
Prices for ex-Japan SAE1006 HRC for the Asian region have slipped to $660-680/mt CFR in late April, down by $50-70/mt month on month. Extremely limited sales to Pakistan and Bangladesh have been heard over the past month given the liquidity issue in both countries. Meanwhile, in Vietnam, the interest in Japanese HRC offered at around $670/mt CFR has been close to zero given the more attractive offers coming from China at $640/mt CFR. “Some market insiders expect China’s mill to drop to $550-570/mt FOB in the coming weeks, while Japan still keeps refraining from lowering offers below $650/mt FOB,” an international trader told SteelOrbis, adding, “Japan is always late in dropping price. Their offer is at around $670/mt CFR in Asia, but no bookings yet until they lower their numbers.”
In the meantime, Japanese HRC suppliers have continued to actively offer their materials to the European market in April. However, offers for ex-Japan HRC have dropped to €720/mt CFR southern Europe, versus €790-800/mt CFR in late March, standing in line with offers from South Korea, but less competitive than those from India, Vietnam and Indonesia.
At the same time, offer for ex-Japan SAE1006 HRC have remined rare in the Middle East, with the indicative prices standing at around $720/mt CFR, down by $20/mt month on month. However, given aggressive ex-China HRC offers in the region at below $640/mt CFR, Japanese suppliers will have no choice but to lower their offers. “They [Japanese exporters] are not officially offering in the Middle East, but are hinting at acceptance at below $700/mt CFR,” a Japanese trader said.
Furthermore, according to market insiders, offers for ex-Japan HRC in South America have been heard at around $710/mt CFR, versus $755/mt CFR last month. As the same time, Chinese suppliers have been offering their HRC at around $680/mt CFR in the region, while customers’ bids have already been reported at $650/mt CFR Pacific Coast.