During the second week of February, although most countries have continued to be positive in terms of prices, more and more doubts regarding any further uptrend have been appearing globally. In particular, Indian HRC suppliers have been the most positive this week, taking advantage of the expansion of sales to the EU and the Gulf region. At the same time, while European HRC producers have decided to keep their offers stable, import quotes have increased in new deals for ex-Asia materials, from India, South Korea and Vietnam, in particular. Meanwhile, business activity has been rather weak in Asia, with Chinese HRC producers keeping their offers stable at high levels, while traders on the contrary have decreased their prices, to Vietnam, Pakistan and other Asian countries. In Turkey, all steel business has been at a standstill following the massive earthquakes which hit the southeast of the country on February 6, resulting in a humanitarian catastrophe.
Ex-India HRC prices have increased further since late last week by $20/mt, with some sellers being successful in pushing volumes at higher levels to Europe and the Gulf region. The SteelOrbis reference price for ex-India SAE1006 2 mm HRC has settled at $700-740/mt FOB, versus $680-720/mt FOB. In particular, after concluding deals at $780/mt CFR to Europe, which translates to $710-725/mt FOB depending on the freight, mills have hiked offers further and manage to achieve even higher levels in the EU. A small tonnage from at least one Indian mill has changed hands at $800/mt CFR, or around $730-740/mt FOB. In the Gulf region, offers to the UAE have been coming mostly at $740-750/mt CFR, with one trade rumored to the UAE at $720/mt FOB or $750/mt CFR.
In Europe, the range of domestic offer prices has remained mainly unchanged given the full order books of European mills for the first quarter of this year. In particular, HRC offers prices in the EU have remained at €740-780/mt ex-works, with workable prices in Italy and Spain still standing at €740-750/mt ex-works, but with the official HRC offers from mills at €760-780/mt ex-works, while in northern Europe domestic HRC prices have remained at €760-780/mt ex-works, the same as last week, with transaction prices still voiced at €750-760/mt ex-works. At the same time, foreign HRC suppliers have continued to test the market with slightly higher offers this week. Thus, import HRC prices in southern Europe have increased to €730-760/mt CFR, versus €720-745/mt CFR last week. In particular, offers from Asia, Indonesia, Taiwan and South Korea have been heard in Spain at €750-760/mt CFR, up by around €20/mt week on week, with a deal for ex-South Korea materials reported to have been done at €750/mt CFR this week. Meanwhile, in Italy, most ex-Asia HRC offers have been heard at €730-750/mt CFR, with several deals for ex-India reported to have been done at $800/mt CFR and slightly above level (around €743/mt CFR), up by €20/mt on average week on week. Furthermore, according to sources, a Vietnamese producer has sold its HRC to southern Europe at around $680/mt FOB this week.
In China, although this week most big mills have decided to roll over their export prices, the tradable level has dropped further, especially in contracts to Asia, while to higher-priced destinations most traders have kept maintaining high prices. In particular, export offers for boron-added SS400 HRC given by major mills are at $650-670/mt FOB, with the midpoint at $660/mt FOB, the same as last week. Meanwhile, the tradable level for ex-China SS400 HRC has settled at $605-640/mt FOB, depending on the destination, versus $625-640/mt FOB last week. At the same time, domestic HRC prices in China have decreased over the past week amid the slower-than-expected post-holiday demand recovery and dropping futures prices. Thus, domestic HRC prices in China are at RMB 4,100-4,230/mt ($602-621/mt) ex-warehouse on February 10, with the average price level RMB 50/mt ($7.3/mt) higher than that recorded on February 3, according to SteelOrbis’ data.
In Vietnam, the price range for imported SAE1006 from different sources has been at $635-700/mt CFR Vietnam, according to reports from market sources. The lower end of the range - $635-640/mt CFR - corresponds to offers from traders and small mills. Meanwhile, other mills have been offering their materials at around $655/mt CFR Vietnam, while big mills, like Benxi Steel, Shagang, Baosteel, etc., have been offering SAE1006 HRC at as high as $675-680/mt CFR Vietnam. At the same time, in the SS400 HRC segment, the gap between traders’ and mills’ offers has been even wider given that smaller mills and traders in China have been offering SS400 HRC at around $620/mt CFR Vietnam, down by $10-15/mt week on week, with several deals for 5,000-10,000/mt in total reported to have been done at $615-616/mt CFR, while official offers for ex-China SS400 HRC from major mills have been at around $660/mt CFR. There has been a lack of offers from non-Chinese suppliers in Vietnam. Talk about a deal for 10,000 mt of ex-Japan SAE1006 signed at $700/mt CFR has been circulating in Vietnam this week, though this information has not been confirmed by the time of publication. The indicative price level for ex-India HRC has been at $700/mt CFR and above, the same as last week. The SteelOrbis reference price for import SAE1006 HRC in Vietnam has moved to $635-655/mt CFR, compared to $650-670/mt CFR last week.
In the UAE, there has been a slowdown in trading activities due to certain market participants hearing ex-China HRC offers for SS400 grade at roughly $670-680/mt CFR. As a result, there are predictions that China HRC offers will soften in the coming week. In the meantime, the majority of ex-China HRC offers have been the same as last week, at $690-700/mt CFR to the UAE. However, further encouraging improvements in India have increased HRC offers by $20/mt to $740-750/mt CFR to the UAE, even though offers from South Korea and Japan have remained stable at $745/mt CFR and $740/mt CFR, respectively.
In Turkey, business negotiations in the steel market have been almost entirely muted this week, following the huge earthquakes which hit the southeastern part of the country on February 6. The Iskenderun region, which is a home to around 25-30 percent of Turkey steel production, has been affected and the producers and market players are trying to assess the consequences for business. Along with the massive humanitarian catastrophe and numerous casualties, the region is facing critical logistical and infrastructural damage. The local steel producers, according to sources, are conducting inspections of their assets and are expected to resume operation as soon as possible. Taking into account the above situation and minimal business negotiations, domestic HRC prices in Turkey are considered to have remained stable this week at $780-790/mt ex-works. In the import segment, there have been offers from Russian mills at $700-720/mt CFR depending on the mill. Business discussions are to resume next week once the market situation gains some clarity.
As for Russia, the two active producers are concentrating more on the domestic market, where the demand is decent, though it is somewhat speculative. The domestic prices for hot rolled sheets are at around $680-685/mt CPT, while for exports the estimated prices for HRC from Russia are at $620-630/mt FOB Baltic region and $680-690/mt FOB Black Sea. The latter level is not considered workable, specifically in Turkey, although some buyers may share an expectation of a certain flats deficit in the country to be seen soon. In addition to HRC, Russia is in the market to trade slabs, but the prices vary depending on the producer and the destinations. One of the mills is targeting $500/mt FOB Baltic, while another is negotiating at around $580/mt FOB in the Turkish market and at around $610-650/mt FOB in Europe.
