In the second week of March, the global hot-rolled coil (HRC) market remains chaotic in terms of pricing and trade routes. While HRC exports from Ukraine are definitely halted, Russia-based exporters are trying to evaluate their chances of maintaining their presence in the market. Numerous sanctions against Russia involve a lot of financial risks and payment issues. Logistics are also impacted since there are some port restrictions and also reputational risks. Russian mills definitely aim to concentrate on sales to Asian markets, given that in this region the influence of the sanctions is somewhat softer, at least for now. In addition, market players evaluate the probability of Russia redirecting some of its HRC volumes via China and even Iran. Furthermore, there are ex-Russia HRC offers to Turkey, even with some deals reported, but buyers are generally waiting to estimate all the risks.
In Turkey, domestic HRC prices for May-June production have settled at $1,200-1,250/mt ex-works for now, but levels $20/mt lower are said to be possible. Exports remain slow with only limited volumes traded within the mentioned range. In the meantime, Turkey seems to be still interested in ex-China HRC since the prices are quite reasonable. According to sources, at least 30,000-35,000 mt have been booked this week, while some state the sales totaled 100,000 mt. Previously, SteelOrbis reported that Turkey had booked 200,000-250,000 mt of various flats from China since the end of February, but mainly this was HRC. In the coated steel and cold-rolled coil (CRC) segment, local prices in Turkey remain relatively stable, but at rather high levels. The market sources report that domestic demand has been insufficient lately, particularly for HDG. However, some export sales were closed this week, at $20-30/mt lower than domestic levels.
ArcelorMittal has increased its HRC offers by €150/mt to €1,300/mt on March 10, confirming the rumors circulating in the previous few days. In addition, HRC import supplies to the EU are being reshaped nowadays as the missing volumes from Russia and Ukraine have to be substituted. Increased sales in the local market may have been an option, but rising costs and limited slab availability create certain restrictions. The import segment in Europe remains active as deals have been closed to Spain and Italy mainly from India - at €1,100-1,140/mt CFR. Offers are also coming from Japan and Taiwan, and Vietnam is also expected to announce solid offers early next week.
In the Gulf Cooperation Council (GCC) region, HRC buyers have opted to deal for Chinese origin material, since India, which is a more regular supplier to the region, has been focusing on more marginal sales to the EU and Turkey. The latest offers from China to the UAE have been reported at $1,010-1,020/mt CFR, while ex-India offers are expected to be not lower than $1,100/mt CFR.
India has shifted its focus from the Asian region to meet demand from the EU, Egypt and Turkey. As most major offers for May shipment HRC from Indian mills to Turkey and the EU have been reported at $1,050/mt FOB and above, the SteelOrbis reference price has been increased from $920-1,030/mt FOB late last week to $950-1,050/mt FOB. Besides, as regards European destinations, a deal to Italy has been reported at $1,190/mt CFR (around $1,100/mt FOB) and even a few unconfirmed deals were heard at as high as $1,200-1,250/mt Spain, which translates to above $1,150/mt FOB level. In the meantime, although Indian mills have continued to push for higher prices, the available volumes are limited as the mills are fully booked until the end of April.
Vietnamese HRC buyers who booked around 200,000 mt of ex-China SAE1006 HRC at $870-910/mt CFR last week, have continued to sign new deals this week. Thus, several deals for around 50,000 mt of Chinese origin SAE1006 HRC have been signed at $910/mt CFR this week. Besides, around 50,000 mt of SS400 HRC has been booked at $870/mt CFR via traders. SteelOrbis’ reference price for import SAE1006 HRC has moved to $910/mt CFR, up by $30-40/mt over the past week, against the backdrop of the recent deals with Chinese suppliers.
China has been the most active HRC exporter globally for the last two weeks, having sold a huge volume since the beginning of March and at the most competitive prices among all foreign HRC suppliers. This week, in Asia, Vietnam, Pakistan and South Korea made new bookings through traders. Besides, new deals have also been reported in Turkey and the Middle East. For the most of the week, the official export offer level for SS400 HRC from Chinese mills has been standing at $880-900/mt FOB, up by $55/mt week on week, but offers from Chinese traders have been voiced at $835-865/mt FOB, though today the price range is wider as the levels differ depending on the sales destinations. Domestic HRC prices in China have been relatively stable over the past week, standing at RMB 5,125/mt ($809/mt) ex-warehouse on March 11, according to SteelOrbis’ data.
