Asian hot-rolled coil (HRC) suppliers remain focused on offers and sales to the European Union and Turkey rather than on dealing with buyers from their own region. The reason is still the high pricing set by the EU mills recently and maintained by the Turkish producers this week. China remains most active in the Turkish market, having minimized the presence of alternative foreign sellers here, while HRC producers from India, Japan, Vietnam, and Taiwan remain focused on sales to the EU and at higher price levels than a week ago.
In the EU, the workable price levels for domestic HRC have been set at €1,300-1,380/mt ex-works Italy, according to the latest information. In Spain specifically, producers’ offers are at €1,400-1,450/mt ex-works, but buyers assume they have some room for negotiation. In the import segment, most of the ex-Asia offers to southern Europe are at €1,250-1,280/mt CFR, while an Egyptian seller has increased its price to €1,320/mt CFR.
In the Turkish market, most domestic producers are still offering HRC for June production at $1,280-1,350/mt ex-works, with the $1,250/mt ex-works level also available. As regards exports, according to sources, in the past few weeks Turkey has been selling to Albania, Romania, Macedonia and some North African countries over past weeks in small lots at $1,250-1,300/mt FOB. The most recent FOB offers are at $1,300-1,330/mt FOB. In the meantime, the import HRC segment in the Turkish market remains dominated by China. Chinese suppliers are ready to deal at levels over $200/mt lower than those from India and Vietnam and $250-300/mt lower than Turkish domestic offers. As a result, China has sold large HRC lots this week to Turkey at $1,000-1,030/mt CFR for May shipments. According to some sources’ evaluations, from the end of February China has sold close to 700,000 mt of various flat steel products to Turkey. Most of the tonnage is said to be HRC, but the total volume also includes some cold-rolled coils, cold-rolled full hard material and some coated steel.
CIS-based mills are barely represented in the export markets nowadays since there are no shipments from Ukraine and Russian suppliers have a lot of trouble exporting in terms of payments, insurance, shipments, etc. The indicative offer from NLMK has been reported at around $1,000/mt FOB Black Sea this week, while a similar level was last heard from MMK. Severstal has decided to concentrate on the Asian markets, but it seems that the company is still at the negotiation phase since no fresh deals have been reported. Moreover, the general market pricing for HRC and business activity have been rather slack in Asia lately.
HRC import prices in Vietnam have posted another increase this week. Most offers were coming only from China, as other foreign suppliers have been focused on other destinations. After a deal for ex-China SAE1006 HRC was done at $905/mt CFR for May shipment early this week, up by $5/mt week on week, ex-China HRC offers have increased to $910-920/mt CFR by the end of the week, and some offers from mills have even been heard at $950/mt CFR level. Besides, new offers for ex-China SS400 HRC have been voiced at $870-880/mt CFR Vietnam, up by $15-25/mt over the past week. Given the weak consumption in Vietnam even though customers are in the market for local sourcing at the moment, HRC exports from Vietnam may rebound in the near future. In particular, according to sources in southern Europe, HRC offers from Vietnam have been voiced at around $1,365/mt CFR. Besides, offers for ex-Vietnam HRC have been heard in Turkey at $1,260/mt CFR.
In India, most HRC exporters have continued to aggressively push up their prices and have completely vacated the Asian markets amid significant support from the EU and some African countries. Besides, Indian mills are better positioned to pass on higher input costs in the MENA and the EU regions through higher achievable finished steel prices compared to the Asian region. The tradable ex-India HRC price range has increased to $1,080-1,220/mt FOB, with the midpoint at $1,150/mt FOB. The latest deals to Europe have been close to the higher end of range, while the lower-end prices correspond to the level for Africa. However, by the end of the week, European buyers have reported Indian offers already at $1,390/mt CFR Antwerp, which translates to above $1,290/mt FOB.
Ex-China export offers for boron-added SS400 HRC have increased to $835-885/mt FOB for May shipment, up by $7.5/mt compared to March 15, supported by the rising trends in local prices and HRC futures prices, along with higher demand for HRC globally. This gap between the lower and upper ends is explained by the price gap between offers to Asia and other markets. Chinese HRC suppliers have continued to actively sell their material to buyers all over the world, though Chinese thin coil suppliers have been mainly focused on supply to higher-priced markets, being still the most competitive among all foreign suppliers. In particular, numerous cargoes for SAE1006 HRC have been sold to Africa and the Middle East at around $890-900/mt FOB (around $980/mt CFR). Furthermore, Chinese suppliers have managed to sell big tonnages of HRC at $1,000-1,030/mt CFR to Turkey this week. Most market insiders expect China to further expand exports to higher-priced destinations, though some sources have started to talk about the supply concerns caused by the lockdown in the top steelmaking hub of Tangshan in northern China’s Hebei Province. Tangshan entered a temporary lockdown on Tuesday to contain the spread of Covid-19 infections.
