Hot rolled coil (HRC) prices globally have maintained their downward trend in most regions. In Asia, prices have fallen amid another decline in China, while business has remained slow in Vietnam with bids having dropped even further this week. Indian HRC suppliers also kept decreasing their offers, though the latest decline was relatively small compared to previous weeks, and Indian sellers were even able to secure slightly higher realizations from sales in the UAE. Turkish mills have made attempts to increase their HRC prices ahead of the holidays, and their higher offers to Europe are a clear confirmation to this, though demand in Turkey has remained weak. In Europe, HRC prices are still trending down, but sentiments are better as restocking activity is expected in the second half of July, before the traditional summer holidays in August. Russian HRC suppliers, who have been offering their materials to different destinations, are still failing to succeed in concluding sales, though they may seek to boost trading activity if the national currency tumbles.
In China, prices in the local Chinese HRC market declined last weekend, and, subsequently, some traders started to offer HRC position cargoes in the export market at much lower prices. Besides, mills were forced to correct their offers downwards due to worse market conditions, coupled with declining iron ore and HRC futures prices. Thus, export offers for boron-added SS400 HRC given by major Chinese mills are at $660-680/mt FOB for August shipment, with a midpoint at $670/mt FOB, down $20/mt week on week. Meanwhile, smaller mills and traders have dropped their offers to $635-650/mt FOB, down by $10-15/mt week on week. At the same time, the tradable level for SS400 HRC has dropped to $610-660/mt FOB, depending on the destination, compared to $650-680/mt FOB last week. Domestic HRC prices in China are at RMB 4,160-4,250/mt ($621-634/mt) ex-warehouse on July 7, with the average price level RMB 155/mt ($23/mt) lower as compared to June 30, according to SteelOrbis’ data.
In Vietnam, most customers have been showing very limited interest in HRC imports over the past week. Negative expectations, lower finished steel consumption and sluggish export orders have been behind the trend. In particular, the prices available for ex-China position SAE1006 HRC have been as low as $670-680/mt CFR Vietnam, compared to $705-715/mt CFR last week. Besides, offers for ex-China SS400 HRC have been reported at $650-660/mt CFR Vietnam, down by $25-30/mt over the past week. Several deals have been reported at $640/mt CFR, while customers’ bids have already been voiced at $630-635/mt CFR. Indian suppliers who were offering boron-added HRC at $675-695/mt CFR last week, and, according to market sources, sold around 60,000 mt of HRC at $670-680/mt CFR, this week have decreased their offers to $665-675/mt CFR. The SteelOrbis reference price for imported SAE1006 HRC in Vietnam has declined to $665-680/mt CFR, down by $10-30/mt from $675-710/mt CFR on the higher end of last week’s price range, based on higher Chinese offers.
Indian HRC exporters were able to push up trading activity after dropping prices over the past two weeks, compelled by rising inventories and sluggish domestic sales. The latest decline was relatively small and there were sharp variations in realizations from various destination markets. Ex-India alloy HRC prices have settled at $630-650/mt FOB this week, down marginally by $5/mt on average from $630-660/mt FOB last week. The prices at the lower end are for markets like Vietnam, but sellers were able to secure slightly higher realizations from sales in the UAE. Offers to Europe are at around $640-650/mt FOB, down by $10/mt over the past week.
The price situation has been uneven in the flat steel market in Turkey this week. On one side, stronger import scrap prices have urged Turkish mills to increase their official offer levels from around $660-680/mt ex-works which were workable last week to $700-715/mt ex-works currently. However, the improved scrap price is not yet considered a sufficient reason for a solid rebound in HRC prices, given that demand remains low. Moreover, this week prices for most coated steel, cold rolled coils and retail sheets have decreased significantly, reflecting the rather unfavorable market environment. In addition, import offers have generally been coming only from Russia this week and the Russian mills have attempted a price increase from $615-670/mt CFR to $680-700/mt CFR, which is clearly not workable. Moreover, the low interest in the import HRC offers is considered another sign of the weakness of the market in Turkey. This week will be followed by a relative silence during the Feast of Sacrifice holiday period, and afterwards the market is expected to offer a clearer picture. Some sources believe pricing will be more solid, especially given the stoppages scheduled by at least two HRC producers in Turkey for two weeks each in July and August.
In Europe, HRC prices have still been trending down over the past week, while buying interest has remained weak amid very scarce transaction activities due to weak demand. This week, the workable HRC prices in the local market in the EU have settled at €740-870/mt ex-works, compared to €780-880/mt ex-works last week. Meanwhile, sentiments in northern Europe have started to improve this week, with most mills generally believing that HRC prices should finally stabilize in the July-August period. However, sentiment in southern Europe has remained negative and market insiders believe there is still room for a further decline. In the import segment, the general offer levels are at €710-760/mt CFR, compared to €720-760/mt CFR last week, with the lower end corresponding to ex-India HRC offers. According to market insiders, transactions have remained scarce in the southern European HRC market and very few buyers would risk booking imported materials.