The most interesting developments in the HRC trade have been seen in the Asian region this week, given that suppliers are back after the Chinese holiday. The price trend for Asia overall is positive though not many deals have been closed by producers in the region. However, the mills remain bullish even without active sales and more developments are expected to be seen during the coming week. Another issue is that Indonesia has intensified its presence in the export markets, not only in Asia but also in distant markets.
Indonesian steelmaker Krakatau POSCO has been very active with HRC offers in various markets around the world this week given its weak local HRC trade and the need to maximize production at its second hot strip mill to achieve more efficient production costs. However, although offers from the Indonesian mill were rather competitive, most customers have been undecided about purchases mainly due to concerns over quality. HRC buyers in Vietnam have reported an ex-Indonesia HRC offer at $850/mt CFR. Besides, market insiders are discussing a deal for ex-Indonesia HRC signed at $830-840/mt CFR Vietnam on a no-claim basis. However, this was not confirmed by the time of publication. “The Indonesian price is quite competitive, but we do not see any interest in Vietnam so far as buyers are not sure about the quality,” a Vietnam-based trader told SteelOrbis. Meanwhile, ex-Indonesia HRC has been booked in Pakistan at $860/mt CFR this week, while offers have been voiced at $870-880/mt CFR.
Indian mills have continued to aggressively hike HRC prices this week given a surge in domestic realizations and a drawdown in inventories, and given their export allocations. At the beginning of the week, ex-India prices for SAE1006 HRC increased by $50/mt week on week to $840-880/mt FOB. The last booking for ex-India HRC to Europe was reported at $925/mt CFR, but suppliers have increased offers to Europe even further, to $950/mt CFR. Besides, new offers from some mills for April shipment to Turkey and Egypt have been voiced at $930/mt CFR, translating to $870-880/mt FOB. And though there have been no fresh trades lately at above $900/mt CFR, they are very much expected. The lowest level was still for Vietnam, where Indian mills have been offering at $870-880/mt CFR, while the material from traders has been offered at $840-850/mt CFR.
In Vietnam, offers for imported HRC have as expected increased after the Chinese New Year holiday. The new prices for ex-Chinese SS 400 HRC have indicated an increase from $800/mt CFR before the holiday to around $840/mt CFR this week. Suppliers from India have voiced their offers for SAE1006 HRC at $870/mt CFR, up $50-60/mt over the past two weeks, but Vietnamese customers said that they will negotiate at $850/mt CFR. Meanwhile, offers from a Japanese HRC supplier increased to $950/mt CFR. Vietnamese importers are mostly evaluating the situation and plan to resume purchases when local producer Formosa Ha Tihn Steel announces new HRC prices next week.
In China, boron-added SS400 HRC prices have moved up after the holiday this week by $35/mt, compared to two weeks earlier, with a midpoint at $820/mt FOB. Market players believe that this move is more like a test for the market considering the recovery in futures prices and the bullish mood in the global market. Domestic HRC prices in China are at RMB 5,075/mt ($798/mt) ex-warehouse on February 11, up by RMB 190/mt ($30/mt) as compared to January 28, according to SteelOrbis’ data. Demand for HRC has not been released fully yet after the holiday, but it is likely to improve in the coming period, supporting further price growth.
In the CIS HRC export segment, most eyes have been on the Turkish market, where the price levels have been promising. After trading some volumes, the suppliers were not in a rush to increase sales, but have been watching the competition closely, specifically due to the increased number of offers from Asia. In the Black Sea region, ex-Ukraine HRC export prices have remained at around $905-915/mt FOB, while offers from Russia have been set at $905/mt FOB from one mill and increased by $20/mt to $920-925/mt FOB from another producer. The Baltic region-based HRC exporter in Russia has been out of the market this week as it had already closed its March production sales. Given the improving market in the EU, the mill may announce its April sales shortly and is expected to increase prices, also citing the significant rise in domestic flats prices in Russia.
The general market situation in the European HRC market has been gradually improving, although the price rises are still limited by negative expectations regarding consumption by the automotive industry. Still, some restocking has been seen and the workable HRC prices in the local market have increased by €10/mt on average to €850-860/mt ex-works in the Italian market, while the mills’ maximum offers are at €900/mt ex-works. In the northern region of the EU, HRC prices have remained stable. In the meantime, the import side has been relatively lively, with deals closed mainly from Asian destinations, i.e., India, and Japan, but earlier this week. In the meantime, ex-Turkey HRC prices remain largely unworkable in the EU, given high offers and effective AD rates.
The uptrend in the HRC market in Turkey has slowed somewhat this week following the rapid rise seen from the end of January. The local mills have continued to insist on $950-960/mt ex-works levels minimum, with $970-980/mt ex-works offers also being voiced, all for May production. Some market players are sceptical regarding whether the levels are workable currently, thinking that, without decent exports, the mills will have to provide discounts sooner or later. In addition, the import segment has become more crowded with Indonesia and Japan offering, along with the regular CIS-based and Indian suppliers. By the end of the week, ex-Ukraine HRC pricing has remained at $930-940/mt CFR depending on the coil weight, while one Russian mill has increased its offers by at least $20/mt to $950/mt CFR and above for the remaining allocation. The latest ex-India offers were heard at $930-935/mt CFR Turkey. By the end of the week information regarding fresh ex-Asia bookings has been discussed in Turkey.
