Prices for ex-Japan HRC moved up gradually in January, while they have already reached the high levels seen in late December. However, suppliers have been forced to cut prices by the end of January, seeing weaker sentiment globally. For now, major mills have sold out for March shipment coils and have not released their offers for April.
Prices for ex-Japan SAE1006 HRC of 2 mm maximum peaked at $800-820/mt FOB earlier this month, while the highest sales were at $770-780/mt FOB at end of December. But over the last week of January the prices have dropped, when sellers have been closing their order books for March. The latest deal prices in Asia have been at $750/mt CFR to Pakistan, which corresponds to $720-730/mt FOB. The previous transaction level was $770-780/mt CFR.
Bids from European customers have also declined lately, not exceeding $820/mt CFR, which translates to $780/mt FOB or so.
“The FOB base price level from Japan seems to have dropped, but second quarter negotiations have yet to start in most of the regions. All the allocation up to March is sold out,” a Japanese trading source said.
The latest offers from Japan to Vietnam were heard at $780/mt CFR, but they have disappeared by late January. Most buyers have been focused on purchases of Chinese coils, as they have been much cheaper. The tradable level for re-rolling grade thin coils from Japan has been estimated by Vietnamese sources at $720-730/mt CFR, which was not attractive for exporters at all.
“Japanese mills are still in a wait-and-see situation ahead of the Chinese holidays at least. A clearer picture would be found after the holidays,” a source said.