During the last week of August, Chinese suppliers have kept selling sizable lots at discounted prices to its main trade destinations, including Asia and the Middle East, putting the global hot rolled coil (HRC) market under continuous negative pressure. However, some suppliers like those from India have kept refraining from any price reductions, emphasizing the better sentiment in their local market, coupled with anticipation of European buyers return from the summer holidays, as the bullishness of European HRC mills for September has already provoked hikes in import prices this week.
Although ex-China boron-added SS400 HRC prices from mills have remained mainly stable compared to the previous week at $560-580/mt FOB, the tradable level for SS400 HRC has lost at least $10/mt week on week in new offers and deals globally, following numerous deals reported at around $540-550/mt FOB last week. Several new deals for ex-China SS400 HRC have been confirmed at $540-543/mt CFR, down by $5-6/mt from the deal prices last week, while more than 20,000 mt of ex-China Q195 have been sold at $538-540/mt CFR. Meanwhile, more deals have been reported in the Middle East, the UAE in particular, at $570/mt CFR, while most offers have been voiced at $575-580/mt CFR, down by $5/mt week on week.
At the same time, Chinese suppliers have been active in sales for special grades HRC, in the Middle East in particular, with a batch of around 8,000-10,000 mt of thin gauge HRC sold in Oman at $595/mt CFR, for October shipment. Besides, another deal for 7,000-8,000 mt of special grade HRC is reported to have been sold in Saudi Arabia at $630/mt CFR. Furthermore, around 2,000 mt of ex-China Q355 HRC have been sold in Turkey at $585/mt CFR this week.
Domestic HRC prices in China are at RMB 4,050-4,060/mt ($558-559/mt) ex-warehouse on August 31, with the average price level RMB 10/mt ($1.3/mt) lower compared to August 13, according to SteelOrbis’ data.
Ex-India HRC prices have been voiced at $590-620/mt FOB, slightly higher from $585-620/mt FOB last week, but Indian sellers have held back offers to the Asian region, resisting overall pressures on the price line from cheaper ex-China offers. However, according to sources, despite the greater activity of ex-China sellers and although workable prices remain under pressure, Indian mills are better placed, riding on resurging domestic demand.
At the same time, this week India has booked significant volumes of Asian HRC, limiting the upside potential of local prices. In particular, around 100,000 mt of ex-Vietnam HRC were booked over the past week at around $585/mt FOB, or in the range of $610-615/mt CFR. Besides, ex-South Korea import HRC bookings have also been reported over the past five days, although the aggregate tonnage was lower at around 30,000 mt at the average price of around $600/mt CFR, maintaining a strong discount compared to local prices and offering renewed import competition to local mills. According to sources, higher imports are the result of the local market being in a short supply situation, but this will ease as some mills under maintenance shutdowns will resume operations over the next two to three weeks.
In Vietnam, trade activity in the SAE1006 HRC segment has been rather slow as compared to the SS400 and Q195 HRC segments, with indicative prices for import SAE1006 HRC standing at $575-580/mt CFR, versus $575/mt CFR last week. Meanwhile, following offers for ex-China SS400 HRC at $555/mt CFR at the end of last week, this week new offers have rolled back to $545/mt CFR, which resulted in a few deals signed at $540-543/mt CFR for October shipment, though new offers have been voiced again at $550-555/mt CFR by the end of this week. Besides, according to sources, more than 20,000 mt of ex-China Q195 HRC is reported to have been bought by Vietnamese customers at $538-540/mt CFR.
In the UAE, even though sluggish end-user demand and slower business activity have persisted, most Emirati buyers have chosen to keep buying lots in order to replenish stocks since they are optimistic as regards the future market outlook. According to reports, Emirati purchasers have purchased around 20,000 mt of ex-China HRC at $570/mt CFR within the last few days and overall offers from China have remained at $570-585/mt CFR to the UAE. Also, this week, a HRC deal for 1,500-2,000 mt of Chinese material was reported through a UAE trader and sold in Turkey for $585/mt CFR, for October shipment. Additionally, some particular grades of HRC were sold from China to the Gulf. Oman importers ordered 10,000 mt of thin gauge HRC at $594-595 CFR for shipment in October and Saudi Arabia ordered about 8,000 mt of API, X42 HRC at $630 CFR for shipment in October-November. On the other hand, due to the current low offers especially from China, Indian and South Korean suppliers of HRC have maintained their position of silence and once again have not offered any prices to the UAE. According to exporters in these countries, these price levels are far lower than what they plan to give and so they have chosen to concentrate on their own local markets.
The HRC market in Turkey has been relatively quiet this week with not much business activity seen. Some buyers had restocked previously in the domestic and import segments, while mills are currently not under much pressure in terms of allocation. Most offers are for October and even November deliveries. Realistic local offer levels are at $660-680/mt ex-works base, while offers up to and slightly above $700/mt ex-works have also been received by some buyers. The export market is silent for now, following the sales in the first half of August and the latest indications have been reported at around $640-650/mt FOB. The cautious uptrend in the European market provides certain optimism for Turkish sellers as well and they are counting on higher-priced sales. In the import segment, China has dropped its offers for Q195 grade of 3 mm and higher by $10/mt over the past week to $570-575/mt CFR for October shipments. A small sale has been reported at $585/mt CFR for Q355 grade.
Trade activity in the European HRC market has remained muted during the last week of August. At the same time, while the market has continued to actively discuss reports that mills, including ArcelorMittal, are aiming to increase their HRC offers to €700/mt ex-works in the next round of sales, workable prices for HRC are evaluated at €630-665/mt ex-works, versus €630-650/mt ex-works last week. Such a slight increase reflects the higher offers in northern Europe, standing at €650-665/mt ex-works, up by €10-15/mt week on week. According to sources, Italian mills are also bullish for September, and the price is expected to reach €680/mt ex-works. However, for now, tradable prices have remained at last week’s levels, at €630-650/mt ex-works. At the same time, although import HRC trade is still in a lull in the region, European HRC mills’ bullishness for September has provoked hikes in import prices, which by the end of the week have increased to €620-630/mt CFR, depending on the supplier, versus €600-610/mt CFR last week.