Global hot rolled coil (HRC) markets have shown uneven and largely cautious conditions this week, with pricing signals increasingly influenced by policy-driven changes in China rather than by any underlying demand recovery. The introduction of export licensing in China has continued to distort trade flows, removing low-priced non-VAT material from most overseas markets and creating selective upward pressure on prices, particularly in regions more exposed to Chinese supply like Asia, Turkey and the UAE. Meanwhile, in Europe, HRC prices have shown little change overall, even as ArcelorMittal has continued efforts to push prices higher. Market participants have remained cautious, citing weak demand and uncertainty over the sustainability of any upward momentum, while the new CBAM regulation announcement added more chaos rather than clarity.
This week has brought some turbulence to the ex-China HRC market. While HRC futures prices in China have continued to fluctuate within a limited range, export prices from big Chinese mills have started to edge up slightly. At the same time, offers from most traders have remained relatively stable, but low-priced non-VAT offers from traders have disappeared from the market following the introduction of export licensing for certain steel products, including HRC. Specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $465-490/mt FOB, with a midpoint at $477.5/mt FOB, up by $5/mt week on week. Meanwhile, offers from smaller private mills have been voiced mainly at $460-470/mt FOB, mostly the same as last week. At the same time, tradable prices for Chinese SS400 HRC have settled at $455-465/mt FOB, the same as last week. Besides, according to sources, offers from non-VAT traders which were voiced at $445-455/mt FOB last week have disappeared from the market due to the introduction of export licensing.
The market has been actively evaluating the impact of these new licenses: some HRC exporters have become more positive, though most fear that the new steel export licensing requirements, combined with existing concerns over steel demand, could weigh on domestic HRC prices, as previously cheap non-VAT export volumes could be redirected back into the domestic market. As of December 19, HRC futures at Shanghai Futures Exchange are standing at RMB 3,269/mt ($463/mt), increasing by RMB 37/mt ($5/mt) since December 12, while declining by 0.24 percent compared to the previous trading day, December 18.
Import prices of HRC in Vietnam have posted a slight increase this week, driven primarily by higher offers from Chinese suppliers mainly because low-priced non-VAT offers from traders have disappeared from the market following the introduction of export licensing for certain steel products, including HRC. More specifically, ex-China Q235/SS400 HRC, 2,000 mm offers in Vietnam have been voiced at $480/mt CFR for end-of-January shipment, compared to $470-472/mt CFR last week. Meanwhile, other foreign suppliers of SEA1006 HRC have so far maintained their prices stable or applied only minimal upward corrections. Offers for ex-India SAE1006 HRC have been voiced at $479-482/mt CFR for February-March shipment, up by $4-7/mt week on week, though, according to sources, most bids are still voiced at $475/mt CFR. Furthermore, offers for SAE1006 HRC from other Asian suppliers, including those from Indonesia, Japan and South Korea, have been voiced at $495-510/mt CFR, depending on the supplier, mainly the same as last week. Thus, the SteelOrbis reference price for import SAE1006 HRC has moved to $480-495/mt CFR Vietnam, compared with $475-490/mt CFR last week.
Indian HRC exporters have once again adjusted their offer levels in the Middle East to stimulate sales, with current offers broadly in line with last week’s deal prices heard in the UAE, resulting in modest sales. Specifically, ex-India HRC offers in the Middle East have been voiced at $470-480/mt FOB, compared to $480/mt FOB last week. Meanwhile, ex-India HRC offers in Vietnam have increased by around $5/mt since the beginning of this week to $479-482/mt CFR, which translates to around $460/mt FOB. Besides, offers to the EU have remained unchanged or showed a slight upward bias, reaching $580/mt CFR, with trade activity stalled due to CBAM-related risks and safeguard quota concerns. According to sources, talk about a deal signed for around 20,000 mt of ex-India HRC at $580/mt CFR Italy has been circulating in the market, but this information has not been confirmed by the time of publication. As a result, the SteelOrbis reference price for ex-India SAE1006 HRC has remained at $460-520/mt FOB, up by $5/mt on the lower end of the range week on week. As the year-end approaches, Indian export trade activity is expected to slow, while the New Year is likely to introduce new market dynamics, prompting both buyers and sellers to adopt a wait-and-see approach.
In Turkey, HRC prices have remained largely stable in the local market, with mills targeting $555-565/mt ex-works and up to $570/mt ex-works in some cases. However, trading activity is still rather slow and so the level of $550/mt ex-works is possible for good volumes. The producers are resisting sizeable discounts since import scrap prices are still high, while in the import slab market there is no activity. HRC export offers from Turkey are at $540-550/mt FOB while activity remains limited since the European market is digesting the CBAM details, announced recently. Import HRC offers from China have moved up sharply over the week from $471-480/mt CFR to $500/mt CFR in most offers for re-rolling grades. The key reason is the new regulation announced in China regarding export licenses, which has immediately eliminated non-VAT offers from the market. Some players, however, believe these will be renewed after some time once the market situation becomes a bit calmer. Russian offers from the non-sanctioned supplier have been at $490-495/mt CFR Turkey with lower deals also reported for sizeable orders.
In the UAE, buying interest from the UAE, Qatar and Oman has continued to be seen following some activity late last week, but no new deals have been concluded so far this week. Meanwhile, Chinese suppliers have raised offers after the export license announcement, which has removed lower-priced non-VAT material from the market. As a result, SS400 HRC offers from China to the UAE have increased to $490-505/mt CFR for January shipment, up from $485-500/mt CFR previously. Market sources note that some non-VAT Chinese lots were sold to Omani buyers last week at around $485/mt CFR, though such levels are no longer available. Indian suppliers have meanwhile kept their offers unchanged at $490-505/mt CFR for January shipment, while concluding sales of around 15,000-20,000 mt to buyers in the UAE and Qatar toward the end of last week at approximately $495/mt CFR. Japanese mills have also maintained stable January offers at $485-490/mt CFR, with no fresh deals reported yet, though some buying interest from UAE customers is expected in the coming weeks.
European hot rolled coil (HRC) prices have seen an upward push this week, led by ArcelorMittal, which has raised its domestic offers across the EU by approximately €20/mt compared to last month. Other European mills, especially those in the north, are expected to attempt to follow suit in the near term.
Specifically, in the local EU market, ArcelorMittal announced its new price target for HRC at €670/mt delivered, mainly for March deliveries, up €20/mt from the previous official levels announced last month. Meanwhile, local mills in northern Europe have kept targeting €630-650/mt ex-works for new orders for January and February deliveries, the same as last week, while in Italy offers from mills have remained at €620-630/mt for January delivery. The tradable price levels in the north for January delivery coils have been estimated at €610-630/mt ex-works, mainly for January delivery, up by €10/mt on the higher end of the range week on week, while the tradable price level for January delivery has been estimated at €600-630/mt ex-works, up by €10/mt on the higher end of the range week on week. At the same time, European producers are increasingly counting on the introduction of the Carbon Border Adjustment Mechanism (CBAM), which was published on December 17, while import trade activity has remained close to zero.
Indicative import HRC offer prices have settled at €485-535/mt CFR, compared to €490-520/mt CFR last week, while HRC import offers including CBAM costs on DDP basis have been voiced at €600-620/mt levels, depending on the supplier, up by €5-10/mt week on week. Import offers on CFR basis, excluding CBAM-related costs, have remained scarce in the region this week, with most suppliers providing only indicative numbers. In particular, offers for ex-Indonesia HRC have settled at around $565/mt CFR, which translates to around €485/mt CFR. Besides, offers for ex-India HRC have been voiced at $580/mt CFR, which translates to around €495/mt CFR, with talk about a deal for around 20,000 mt reportedly signed at $580/mt CFR Italy this week, though this information has not been confirmed by the time of publication. Offers for ex-Thailand have settled at around €535/mt CFR, while offers for ex-Turkey HRC have remained at around €520/mt CFR, duty included. Offers for ex-Algeria and ex-Turkey HRC on DDP basis, including CBAM costs, have been voiced at €610-620/mt DDP.