This week, the attention of hot rolled coil (HRC) market players has been mainly concentrated on Asian destinations since many of them have been trying to evaluate the price trend and have signed numerous deals inside the region and also outside such as to the Middle East. Meanwhile, yet another price retreat has been observed in China by the end of the week following the confident uptrend early this week. In the meantime, the European flats market has been almost inactive this week, with local HRC prices continuing to fall.
The continuous fluctuations in Chinese HRC futures prices and the slight recovery in local HRC prices at the beginning of the week have provided some support for the market mood and the tradable level has been corrected up in numerous deals this week. Specifically, in Asia, Chinese suppliers have managed to succeed in concluding new sales to Vietnam and Pakistan. Besides, according to sources, sizable volumes of around 100,000 mt in total have been sold to India at $575-585/mt CFR during the last two weeks, while at the end of last week-beginning of this week deal prices increased to $588-590/mt CFR. Besides, more deals for at least 50,000 mt in total have been reported in the Middle East and South Asia at $560-562/mt FOB. However, by the end of the week, the mood has worsened in China, with export offers for boron-added SS400 HRC from large Chinese mills corrected down by $5/mt since the beginning of the week to $550-565/mt FOB, while the tradable prices have decreased as well, to $535-550/mt FOB, versus $545-560/mt FOB at the beginning of the week.
Ex-India HRC prices have remained at $590-620/mt FOB, the same as last week, while some sellers’ price ideas have continued to be voiced at $620-650/mt FOB. According to sources, the differential between ex-India prices and domestic prices continues to widen, making exports almost unviable, and the disparate outlook in key overseas markets has added further disincentives for pushing exports at the current acceptable prices.
Meanwhile, following reports of falling trade volumes in the local HRC market in India this week, market insiders have reported higher volumes of imports of HRC in the country, which limit the upside potential of local prices. Specifically, sizable volumes of around 100,000 mt in total of ex-China SS400 have been sold to India at $575-585/mt CFR during the last two weeks, while at the end of last week-beginning of this week deal prices increased to $588-590/mt CFR. Furthermore, according to sources, at least 30,000-35,000 mt of ex-Vietnam HRC have been sold to Indian customers at $620-630/mt CFR.
In Vietnam, the future price trend for imported HRC has been lacking clarity this week, with only occasional deals for Q195, Q235 or SS400 reported in the country amid still weak demand, and several deals for SAE1006 as customers needed to replenish stocks. More specifically, following a deal for 10,000 mt of ex-China SAE1006 HRC signed at $580/mt CFR at the beginning of this week, up by $5/mt week on week, by Thursday, September 21, according to sources, new deals for around 30,000 mt in total were reported at $574-575/mt CFR for November shipment, though this information has not been officially confirmed by the time of publication. The SteelOrbis reference price for import SAE1006 HRC has moved to $570-575/mt CFR, versus $580/mt CFR at the beginning of the week. Furthermore, at the beginning of this week, China SS400 HRC offers in Vietnam were reported at $555-560/mt CFR, up by $10-20/mt week on week, while offers for Q195 were heard $545-550/mt CFR, up by $5-10/mt. However, by the end of the week, offers from Chinese traders for both Q195/SS400 HRC have dropped to $540-545/mt CFR, while bids have been reported at $538/mt CFR.
In Europe, the official positions of steel mills, especially those in northern Europe, have remained unchanged, with persistently high offers, standing at €680/mt ex-works. However, the real market situation has continued to be stably pessimistic, with tradable prices at the same levels as last week at €620-630/mt ex-works in Italy and €630-650/mt ex-works in the north. Meanwhile, HRC import offers have remained mainly unchanged at €610-635/mt CFR, depending on the supplier, over the past week, while trade activity has been close to zero and is not expected to revive until early October when the next EU safeguard import quota period will start.
In Turkey, domestic HRC prices have remained relatively stable at $650-680/mt ex-works for November-December deliveries, and demand has been moderate with small and medium-size lots being sold. As for export, the lowest official price range has been reported at $600-615/mt FOB and up to $620-630/mt FOB for non-EU destinations, while for the EU the offers are at up to $650/mt FOB. However, such levels are not considered workable and some customers are aiming to book at far below $600/mt FOB. In fact, some market sources believe Turkey may agree to sell to large customers at $585-595/mt FOB. In the import segment, South Korea has dropped offers by $25/mt over the past week to $585-590/mt CFR, while China has remained at $580-590/mt CFR and now the possibilities that the Chinese will be able to achieve these prices are not high. In addition, Ukraine’s HRC has been on offer in Turkey at $580/mt CFR, local traders have reported.
In the UAE, the gloomy atmosphere has persisted as end-user demand has not improved in recent weeks, though import offers for HRC from China have remained reasonably consistent compared to the previous week, since Omani customers have continued to show interest in their material. In consequence, Omani consumers purchased 10,000 mt of SS400 for $585/mt CFR, while the ex-China HRC offers for SS400 remain at $570-580/mt CFR to the UAE, similar to last week. On the other hand, some Indian suppliers have continued to offer at $620-640/mt CFR to the UAE, with no deals being heard, while the majority of Indian mills are still not offering and prefer to trade in their local market. As the current situation lacks attractiveness, South Korea has likewise maintained its silence on offers to the UAE.