The rapid drop in hot rolled coil (HRC) prices globally has continued this week with the sharp downtrend in Asia remaining one of the main triggers. China has posted sharp declines during the week and even some rebounds in futures prices on Thursday and Friday have failed to change the overall situation. India has had to join China in cutting prices, with a lack of success in Asia, but some sales to Europe. In Turkey, the downtrend has accelerated too. Poor global demand and some raw material price cuts have left no opportunities for HRC suppliers in most regions. Russian sellers, for instance, have been trying to push volumes in South Asia, even providing big discounts.
In China, export offers for boron-added SS400 HRC given by major Chinese mills have settled at $680-700/mt FOB for August shipment, with a midpoint at $690/mt FOB, which has decreased by $50/mt compared to June 14. Meanwhile, offers from smaller mills have been voiced at $650-660/mt FOB. This decrease was affected by declines in iron ore prices coupled with worse-than-expected demand, and the downtrend in futures prices. At the same time, the tradable level for ex-China SS400 has been heard at $630-660/mt FOB, from $700-740/mt FOB at the beginning of last week. In particular, offers from Chinese traders have tumbled to $650-670/mt CFR, down by $30-45/mt since Friday, June 17. Besides, offers for ex-China HRC have been voiced in Europe at $640/mt FOB, while ex-China SS400 HRC offers to Pakistan have been heard at $690/mt CFR, compared to $760/mt CFR last week. Domestic HRC prices in China are at RMB 4,260-4,350/mt ($636-650/mt) ex-warehouse on June 24, with the average price level RMB 385/mt ($58/mt) lower as compared to June 17, according to SteelOrbis’ data.
Trading activity remained muted in Vietnam’s HRC import market this week, while import offers have still been on the wane. Besides, this week the second largest Vietnamese HRC manufacturer, Hoa Phat Group, has finally dropped its local HRC prices, by around $70/mt month on month to VND 16,400/mt ($705/mt) CIF for SAE1006 HRC, and to VND 16,200/mt ($695/mt) CIF for SS400 HRC, for shipment in August and beyond. This move by Hoa Phat Group was expected by Vietnamese customers, considering the sharp drop in ex-China HRC quotations, the recently revised local HRC prices of Formosa to $720/mt CFR, coupled with poor buying in the country. In particular, at the beginning of this week, ex-China offers from traders for SS400 HRC were voiced at $660-670/mt CFR Vietnam, down by $25-45/mt week on week, though by the end of this week numerous small deals have been reported at $650/mt CFR. Meanwhile, ex-India offers for boron-added HRC have been heard at $700-715/mt CFR, compared to the latest deal signed at $738/mt CFR last week. The SteelOrbis reference price for imported SAE1006 HRC has moved to $700-710/mt CFR, compared to $720-725/mt CFR on Friday, June 17.
Indian HRC prices have again ended the week lower as suppliers have been forced to follow the global downtrend. Ex-India boron-added SAE1006 HRC has been settled at $680-710/mt FOB by the end of the week, down by $15-20/mt over the past week and down by $10/mt from the range reported earlier this week. The higher end translates to the latest offers to the Gulf, while the lower end reflects the level mills can offer to Vietnam. In Asia, active declines from China and lower domestic prices in Vietnam have resulted in offers from Indian mills at $710-715/mt CFR, while traders have already been testing the market with $700/mt CFR. This week has been rather active for Indian mills in terms of business in Europe with deals at $765-800/mt CFR confirmed. But a new deal level has already emerged at $745-750/mt CFR, which translates to $690/mt FOB at the highest.
In Europe, HRC prices have still been trending down over the past week, while buying interest has remained weak amid low end-user demand, coupled with high stock levels at buyers, with no sizable restocking activity expected at least until the end of the summer. This week, the workable HRC prices in the local market in the EU have settled at €820-900/mt ex-works, against the levels of €840-940/mt ex-works reported last week. But some sources reported that Italian buyers expect to buy at a maximum of €790-800/mt ex-works, while in northern Europe €870-880/mt ex-works may be the maximum workable level currently. In the import segment, the general offer levels are at €760-820/mt CFR, down by €30/mt week on week, with the lower end of the range corresponding to Indian offers. Besides, following Indian suppliers, offers for ex-Turkey HRC have been heard at €780-790/mt CFR Italy, duty paid, compared to €790-800/mt CFR last week, while ex-Turkey HRC offers to Spain have been voiced at around €810-820/mt CFR, duty paid. Although foreign HRC suppliers have once again pushed prices down, trying to boost sales, trade activity has remained muted in the region, with only a few deals signed in Italy.
Turkish HRC prices have decreased to $700-750/mt ex-works in several steps this week from around $780-800/mt ex-works earlier. The market has already been unfavorable for several weeks now, but recently the sentiment weakened further due to plunging scrap prices, and so HRC buyers have been careful in their purchases. Export demand has also been silent as the European markets have continued to soften and also given active competition from Asian suppliers. As a result, Turkish HRC export prices have decreased to $720-740/mt FOB from $750/mt FOB on average seen earlier this week. However, some sources expect that actual deal levels may approach $700-710/mt FOB. In the import segment, India was offering $740-750/mt CFR this week, while some sources said it has dropped offers by $20/mt by the end of the week. Russian offers for HRC in Turkey were at $680-700/mt CFR this week, but the bids should now be closer to $610-630/mt CFR, sources estimate, citing the recent drop in the local HRC prices in Turkey.
Russian HRC exporters have been struggling as regards pushing volumes abroad because of the Western sanctions due to the war in Ukraine and the slowdown of local HRC demand. As a result, new deals for ex-Russia HRC have been reported to South Asia, India and Nepal in particular, at good discounts. A contract for 30,000 mt of ex-Russia HRC by a Chinese trader was done to India at $650/mt CFR for June-July shipment, which is $60/mt below a sale heard from Russia to India a month ago. Another deal for 45,000 mt of HRC was heard to Nepal at a slightly higher level, at $660/mt CFR. Sources said that both deals were signed at least early last week, while now the tradable levels are much lower. One more Russia seller is in negotiation in India at around $615/mt CFR.