This week, the global hot rolled coil (HRC) market has started to see some cautious signs of optimism, driven mainly by the continuous recovery of ex-China HRC prices, boosted by the rise in futures prices, though the uptrend in most regions still lacks support from end-user demand. Specifically, while more offers for ex-China HRC have been reported at higher levels in different trade destinations, other HRC producers, including those in Asia like Vietnam and India, as well as those in Turkey and even in Europe, have been less successful in their attempts to increase local prices due to the slow recovery of demand.
Chinese HRC mills have decided to increase their export offers given the recovery in futures prices this week together with improved domestic quotes. Export offers for boron-added SS400 HRC from large Chinese mills have settled at $540-550/mt FOB, with a midpoint at $545/mt FOB, up by $2.5/mt week on week. Meanwhile, although some traders have increased their offers as well, most buyers have been holding back from new purchases, bidding at lower levels. The tradable level for ex-China SS400 has been estimated at $517-535/mt FOB, up by $7-10/mt week on week. Ex-China offers in Vietnam have been voiced at around $530-535/mt CFR, which translates to around $517-523/mt FOB, and reflects an increase by at least $10-15/mt over the past week. At the same time, ex-China offers to the Middle East have been estimated at $530-535/mt FOB, or $570-575/mt CFR, up by around $10/mt over the past week.
In Vietnam, given better sentiment in the import segment, and the rebound in ex-China HRC prices in particular, this week Vietnamese HRC producer Hoa Phat Group has announced its new local prices for January shipment higher than initially expected. In particular, most Vietnamese buyers were initially expecting Hoa Phat’s new HRC prices to be below $560/mt CIF. However, new offers for non-skin passed SAE1006 and SS400 HRC have settled at VND 13,990-14,020/mkg ($569-570/mt) CIF, down by $3/mt month on month on US dollar basis, but on Vietnamese dong basis the prices have actually gained VND 70,000/mt ($2.85/mt). In the import segment, offers for ex-China SS400 HRC from non-VAT traders have been heard at $530-535/mt CFR, up by around $10/mt week on week, while other Chinese suppliers have been offering their materials at around $540-545/mt CFR for end of December-January shipment. Meanwhile, reference prices for imported SAE1006 HRC, based on mainly on ex-China offers, have settled at $560-568/mt CFR, up by $8-10/mt week on week. Rare offers from Japanese suppliers have been estimated at $575-580/mt CFR, against $580/mt CFR last week.
Ex-India HRC prices have remained at $590-620/mt FOB, the same as last week, while local mills have persisted in holding back offers amid mounting pessimism in key overseas markets, focusing on local sales, resulting in the continuation of complete silence on the export front. Besides, even with the recent weakening of the local market in India, price realizations have been much better than overseas sales and, considering that integrated mills are getting ready to hike base prices for November, export allocations and sales are mostly on the backburner.
Most European HRC producers have been more positive in terms of their offers for domestic buyers, while interest in imported coils has been minimal in the region. Mills’ offers for HRC have increased to €635-650/mt ex-works for December shipment in Italy and to €650-680/mt ex-works for January shipment in northern Europe, up by €15-30/mt and €10-40/mt respectively, over the past week. However, the tradable prices in Italy have remained at €600/mt ex-works, the same as last week, while the workable price in northern Europe is still estimated at €600-620/mt ex-works as well. As for the import market, most offers for ex-Asia HRC in particular have been heard at €600/mt CFR, including those from Japan, Indonesia and Vietnam. According to sources, following a long pause in purchases, this week more negotiations have been resumed and buyers aim to sign new deals at below €600/mt CFR for January delivery.
Turkish HRC prices have been moving sideways throughout most of the week and the mood has been relatively pessimistic. However, by the end of the week there has been an attempt to raise offers, based on the rise in import scrap prices. In addition, Turkey has announced an antidumping investigation on HRC from China, Russia, Japan, India, which will certainly have an effect in the long run, but it has already affected the mood today. Currently, domestic offers for HRC in Turkey are at $640-650/mt ex-works, up from $620-630/mt ex-works available earlier this week. Moreover, the level of $610/mt ex-works was considered possible for medium-sized bookings. There are still doubts that the mills will be able to achieve an increase, though the non-crowded import segment may provide support for now. Chinese offers have moved up in two steps to $580/mt CFR for December shipments from $555-560/mt CFR in deals last week.
In the UAE, since market demand is not very strong and stock levels are sufficient, Emirati buyers have chosen to hold off trading activities for the week. In the meantime, Chinese suppliers have decided to raise their import offers, but customers are still attempting to negotiate reduced prices. Currently, ex-China offers have risen by $10/mt this week to $570-575/mt CFR, as stated by sources, with a few suppliers' offers at $560-565/mt CFR, but in the current market scenario these prices remain unrealistic. On the other hand, South Korean and Japanese suppliers have preferred to maintain the same prices as last week, at $590-600/mt CFR and $580-585/mt CFR for November and December shipments, respectively. India has continued to refrain from making any HRC offers to the UAE as their domestic market continues to be the most favorable for business activities.