Ex-China hot rolled coil (HRC) prices have dropped sharply this week as the mood has been worsening in the country, where futures prices have been falling. Thus, market sentiments have worsened in almost all major markets globally, though most suppliers have fallen short in their efforts to attract the interest of buyers. Specifically, even though ex-India HRC prices have dropped in line with cuts globally, the new offers still failed to trigger buying. Meanwhile, new local HRC prices from Vietnam’s Formosa have been corrected down only slightly despite the import price slump. Besides, buyers from the Middle East have kept delaying import HRC purchases despite the downward swing in offers. The European HRC market has remained slow in terms of trade, while local prices have remained mostly stable.
This week started with a decrease in local HRC prices in China given the decline in HRC futures prices coupled with the slowdown of stock build-ups by downstream users for winter usage. This, in turn, weighed on HRC export quotations, with both big and smaller Chinese steel producers offering their materials at lower price levels. More specifically, at the beginning of the week, export offers for boron-added SS400 HRC from large Chinese mills were reported at $465-475/mt FOB, with a midpoint at $470/mt FOB, down by $12.5/mt since December 31, though by Friday, January 10, most offers have moved to $465-470/mt FOB. At the same time, according to sources, offers from Chinese traders have been even more aggressive than those from mills, moving down by around $20-25/mt since the last week of 2024 to $445-455/mt FOB, though trade activity has remained moderate amid the slow revival of business activity after the holidays. As of January 10, HRC futures at Shanghai Futures Exchange are standing at RMB 3,312/mt ($452/mt), decreasing by RMB 65/mt ($9/mt) since January 3, though at the same level as compared to the previous trading day, January 9.
In India, HRC export prices have been decreased by large local mills in their offers submitted mainly to the Middle East but have still failed to attract any buying interest, while Europe-based distributors have remained on the sidelines, resulting in prolonged silent market conditions. Specifically, ex-India HRC prices have settled at $500-525/mt FOB, down by $10/mt on the higher end of the range week on week. Most offers for the Middle East have been estimated at $500-520/mt FOB, but no deals have been confirmed even at the lower levels, and this is largely attributed to challenging ex-China offers, coupled with buyers in the region being cautious about building up inventories, expecting further declines in the coming weeks. According to sources, the last business done from India was at around $540 CFR Middle East around three weeks ago, while now $500/mt FOB is very possible, which translates to around $525-530/mt CFR UAE. However, one of the mills has refused to sell to Nepal at $520/mt FOB, considering that price to be too low.
Although import HRC prices have indicated new declines this week, Vietnamese steel producer Formosa Ha Tinh (FHS) announced its new local HRC prices for February and March shipments mostly at the same levels as in December or only slightly lower for large-volume orders. More specifically, on January 8, FHS’ prices for non-skin passed SAE1006 and SS400 HRC in the local market settled at $511/mt CIF for orders for a minimum of 20,000 mt, down by $5/mt month on month, while prices for smaller volumes settled at $520/mt CIF, down by $3-6/mt depending on the quantity. The new prices are viewed by most local buyers as overpriced given the recent fall in ex-China HRC offers, but they have changed market sentiment slightly, giving hope for some recovery in import prices also this month. At the beginning of the week, offers for ex-China SAE1006 HRC were assessed at $485/mt CFR, down by $10-15/mt week on week, though by the end of the week most prices have been reported at $475/mt CFR. Furthermore, according to sources, in late December a deal for around 20,000 mt of ex-Indonesia SAE1006 HRC was signed at around $505-510/mt CFR, while this week offers from Indonesia have been estimated at around $500/mt CFR or slightly below. The SteelOrbis’ reference price for imported SAE1006 HRC has moved to $475-495/mt CFR, against $495-500/mt CFR last week.
The European HRC market has gradually begun to recover after the holiday lull, but trading activity remains virtually non-existent. At the same time, hardly any mill has followed the lead of ArcelorMittal, which had raised its HRC offers by €30/mt across Europe just before the holidays. More specifically, while offers from mills in northern Europe have been voiced at not higher than €580/mt ex-works, mainly the same as before the Christmas and New Year holidays, the tradable price level has been estimated at €560-580/mt ex-works, with some buyers claiming it is still possible to push for levels lower than €560/mt ex-works. Meanwhile, the import HRC market has been completely inactive this week, with most buyers claiming that they have not yet received any new offers. Besides, the general sentiment coming from Asia suggests a rather bleak outlook, with many indicating that the prospects for the near future are far from positive. The indicative prices are estimated at €540-560/mt CFR, down by €20/mt since late December. In particular, according to sources, ex-Turkey HRC offers have been assessed at €550-560/mt CFR, including duty, down by €10/mt on the higher end of the range over the past three weeks. Besides, although no firm offers for ex-Asia HRC have been reported so far, sources estimate prices at around €540-550/mt CFR levels, compared to €560-580/mt CFR before the holidays.
HRC trade in the Turkish market has failed to improve in the first ten days of January following the holiday period. Although Turkish mills are trying to stick more or less to the pre-holiday price levels, the significant price drop in China has been putting pressure on their price positions. Chinese suppliers have dropped their offers to around $480/mt CFR for Q195 quality by the end of the week, down from $505-508/mt CFR at the end of December. Although no information regarding bookings has not been reported yet, most market players expect to hear some transactions shortly since the prices are attractive. Egypt is also in the market to sell, but is currently evaluating the bids from customers. The most recent price idea from Turkey has been reported at $550-560/mt CFR base, which is an acceptable price for the Egyptian supplier. However, no deals have been heard yet. Russia is expected to return with firm offers next week, but many believe its offers should not be above $515-525/mt CFR, versus $530/mt CFR in the latest deals for January production (non-sanctioned material). Local HRC prices in Turkey are mainly at $560-565/mt ex-works and above, but most buyers believe $10-15/mt discounts should be available. As for exports, Turkey’s HRC prices are at $540-550/mt FOB officially, but $530-535/mt FOB is considered workable. However, some bids, particularly from European customers, have been reported at $500/mt FOB base and below.
In the UAE, import HRC offers from China and India have declined significantly over the past week, but no deals have been announced. The reason for the postponement of import bookings by Emirati purchasers is the expected continuation of the downward trend in the coming weeks. According to reports, this week Chinese suppliers reduced SS400 offers by $20/mt from the previous week to $490-500/mt CFR UAE for February shipment. However, other Chinese traders are reported to be offering even cheaper prices to the UAE, at about $585/mt CFR. Likewise, offers from Indian suppliers for February shipment have dropped to $530-535/mt CFR, down from $540-550/mt CFR in the previous week. Meanwhile, Japanese and South Korean suppliers have opted to keep mute on offering HRC to the UAE because of weak trading activity and the aggressive pricing from China.