This week, the global hot rolled coil (HRC) market has started to see some cautious signs of optimism, though the uptrend in most regions still lacks support from end-user demand. Some positive movements in China have supported the levels of offers in Asia. Besides, Indian exporters were also hoping to follow the uptrend, but they were still facing weak demand in all the main destinations. A similar situation is seen in Turkey where the mills have made attempts to increase their offers, following the sharp rises in import scrap prices. In Europe, however, local prices have declined significantly amid sharp drops in northern Europe, under pressure from low demand.
This week, Turkish mills have attempted to increase their HRC prices for the domestic and export markets, following the uptrend in the import scrap segment and generally rising costs of production. Local prices were increased to $640-670/mt ex-works base for September deliveries, but buyers mainly believe that the previous levels of $620-650/mt ex-works are still achievable. Generally, market players believe that mills will have a hard time achieving the higher prices in the short term, mainly because the situation in the coated steel and cold rolled markets is not favourable. The prices for these materials have mostly decreased this week due to low end-user demand and so re-rolling companies in Turkey have been resisting paying higher levels for feedstock HRC. Another factor, influencing HRC mills’ positions is the extremely low demand for exports due to the almost complete absence of EU buyers. Still, the export prices are at $640/mt FOB Turkey minimum. In the import segment, only Russia is in the market, for September shipments at $580-610/mt CFR.
Ex-India HRC prices have reached $575-590/mt FOB this week, with the lower end of the range up by $10/mt over the past week. With Europe on holiday, for now India has been offering mainly to Vietnam and the Middle East. The small rise seen in ex-India prices over the past week corresponds mainly to the Asian market, where firmer offers and rare deals have been seen to Vietnam. At the same time, overall sentiment in the Indian HRC export market has been far from positive, taking into account the still slow local market.
The mood among Chinese traders has improved slightly amid better domestic sentiments based on higher prices of raw materials, including scrap and iron ore. Meanwhile, most Chinese HRC exporters have rolled over their prices this week, with only a few producers raising prices slightly higher. In particular, export offers for boron-added SS400 HRC given by major Chinese mills have settled at $610-640/mt FOB for September shipment, with a midpoint at $625/mt FOB, up by $5/mt week on week. At the same time, offers from smaller mills have been at $595-600/mt FOB, the same as last week. Meanwhile, the tradable level for SS400 HRC has been heard at $580-620/mt FOB, depending on destination, up by $10/mt week on week. Several deals for ex-China SS400 are reported to have increased to $610-620/mt CFR Vietnam, compared to $600-610/mt CFR last week. Domestic HRC prices in China are at RMB 4,020-4,100/mt ($596-608/mt) ex-warehouse on August 12, with the average price level RMB 60/mt ($9/mt) higher as compared to August 5, according to SteelOrbis’ data.
In Vietnam, prices for imported HRC have continued to show some signs of a rebound, since low-priced ex-China offers from traders have not been available anymore and suppliers from India have slightly increased their offers. In particular, the prices available for ex-China SAE1006 HRC have been voiced at $630-640/mt CFR, same as last week. Meanwhile, offers for Indian boron-added materials have been heard at $610-620/mt CFR, up by $10-20/mt week on week, with a deal for 10,000 mt reported at $610/mt CFR. Furthermore, apart from the traditional suppliers India and China, new offers have emerged in Vietnam. Thus, another deal for ex-Taiwan SAE1006 HRC has been reported at around $620/mt CFR Vietnam this week, while offers for ex-Japan coils have settled at $620-640/mt CFR, depending on supplier. As a result, the SteelOrbis’ reference price for import SAE1006 HRC in Vietnam has settled at $610-640/mt CFR on August 12, up by $10/mt from the lower end of the range week on week.
At the same time, Vietnamese steel producer Formosa Ha Tinh Steel, which traditionally announce its local HRC prices in the middle of each month, this time has decided not to issue official offers for HRC for October deliveries. Instead, the company plans to discuss separate offers for each customer.
In Europe, business activities in the HRC market have remained weak in the past week mainly due to the holiday season in the region, coupled with very high stocks of material. The general range of prices in the EU market has settled at €780-800/mt ex-works, compared to €780-900/mt ex-works, with prices remaining unchanged in the Italian market, at €780-800/mt ex-works, but indicating a sharp drop in northern Europe. More specifically, HRC transaction prices have decreased in northern Europe in the past week from €850-860/mt ex-works to €750-780/mt ex-works. However, mills’ offers were higher, with some German mills for instance offering their material at around €800/mt ex-works, down by €100/mt over the past week. At the same time, despite such a significant drop, market insiders have reported low traded volumes, both because buyers have sufficient stocks for the moment and as market players are waiting for the situation to become clearer in September.