This week, the price increase for hot-rolled coils (HRC) slowed somewhat in Europe, Turkey and Asia, but overall the market situation in terms of demand and supplying mills has remained unchanged. China continues offering to Turkey, while European buyers mainly focus on negotiations with other Asian sellers. In the meantime, some higher business activity has been seen this week among the CIS-based exporters. Russia’s NLMK, MMK and Severstal have been seeking ways to normalize exports and to settle payment issues. In the meantime, a total of 70,000 mt of HRC have reportedly been booked from Kazakhstan this week to several destinations, although some market sources have doubts about the actual origin of the material.
In the ex-CIS HRC segment, Russia keeps on trying to sell its products for export in various regions, but specifically in Turkey and Asia. According to sources, MMK has been targeting $1,050/mt CFR, but there have been certain issues with insurance and shipments. Some sources report a mill sold a regular cargo to its asset in Turkey, MMK Metalurji. “In this case, there should be no payment issue since it is basically the same company,” a trader said. NLMK’s indicative offer was at $1,100/mt CFR this week, but once again no deals have been heard. Some buyers in Turkey said that NLMK is currently trying to find ways to organize shipments and, what is more important, payments. Since the company is not yet under sanctions, some HRC volumes may be sold for export shortly. Russia’s Severstal is still trying to sell its April-May production tonnages from Far Eastern ports, being blocked in sales to the EU by sanctions. Some inquiries are heard from Asia, but no firm transactions have been done. The mill has closed only some deals to CIS countries, which is certainly easier compared to exporting to the global market.
It is noteworthy that this week market players have reported several HRC export sales from Kazakhstan, which is rather rare. In particular, 30,000 mt of HRC were sold to Pakistan at $900/mt CFR, 20,000 mt were traded to the UAE at $960-970/mt CFR and another 20,000 mt batch was sold to Vietnam at $880/mt CFR, SteelOrbis has learned. Although the origin for these deals is stated to be Kazakhstan, a lot of market players suspect the real origin is Russia, particularly MMK.
HRC producers in Turkey have kept their domestic prices stable this week, but the levels are high enough to still allow competitive imports. The same as a week ago, Chinese suppliers have been focusing on the Turkish market, offering at $1,000-1,050/mt CFR, depending on the grade, while the local prices in Turkey are at $1,280-1,350/mt CFR, marking a clear advantage for imports. Despite the sizeable gap in prices, Turkish mills are not in a rush to provide discounts, since they believe China may soon leave the market. One reason is that there are expectations that certain logistic issues will emerge due to possible Covid-related restrictions, and this could result in May shipment cargoes being delayed. In addition, some market sources believe talks about export duty may emerge again in China since there has been a lot of export activity going on lately. However, others say that if so, the official discussions may start no earlier than June when customs actually sees the real exported volumes and is able to evaluate them.
In the EU, the workable prices for HRC have increased by €30/mt over the past week to €1,380-1,400/mt ex-works, depending on the region. Sources note that the market has cooled off recently, since previously prices had been rising at a faster pace. The most recent sales to the Italian market were closed from Serbia and Slovakia at €1,350/mt delivered. In Spain’s import segment, the latest deals from Japan and India were closed at €1,220/mt CFR, followed by an increase in offers. Suppliers from Taiwan and South Korea were offering at €1,240/mt and €1,250/mt, respectively, both on CFR basis. In the meantime, ex-Vietnam offers dropped to €1,200/mt CFR. Some interest was also seen in ex-Turkey HRC, though small, while demand for ex-China material is non-existent. Instead of HRC, Europe continues to buy slabs from China, which are not subject to import duty while HRC is.
Indian HRC exporters have slightly moderated their price increase this week compared to earlier in March. Ex-India HRC prices have been voiced at $1,030-1,250/mt FOB. This price is $30-50/mt higher than last week, with the pace of the increase a bit slower than in the previous week, down by $55/mt on average. Meanwhile, the highest realizations at around $1,250/mt FOB or slightly above were reported from sales to the EU region. Besides, apart from sales to Europe, Indian HRC suppliers sold their materials to Africa at around $1,230/mt FOB or slightly above.
Vietnamese HRC importers have been showing minimal interest in new HRC purchases this week. Most offers for ex-China SAE1006 HRC have been voiced at $910-920/mt CFR, the same as last week. Meanwhile, Chinese traders, who offered SS400 HRC at $870/mt CFR last week, have increased their offers to $890/mt CFR and some even to $900/mt CFR this week. However, while other foreign suppliers have been staying out of the Vietnamese market for more than one month, this week a deal for 20,000 mt of HRC from Kazakhstan has been reported at $880/mt CFR.
In China, most mills have increased their HRC export offers amid higher local prices and HRC futures prices. However, despite the increases, Chinese offers have remained the most competitive in higher-priced markets, but Chinese traders who focus on HRC sales to Asia have kept their offers around $50/mt lower compared to mills’ quotes. In particular, export offers for boron-added SS400 HRC given by major Chinese mills are at $880-910/mt FOB mainly for June shipment, moving up by $20-50/mt over the past week. Meanwhile, the tradable level for SS400 HRC has been heard at $845-885/mt FOB, up by $15-35/mt over the past week. In the meantime, HRC prices in the Chinese domestic market have risen amid the declining inventory levels. The worsening of the Covid-19 pandemic in many regions of China has negatively affected the circulation of supplies and the demand for HRC, though supply has also been negatively affected. Domestic HRC prices in China have increased to RMB 5,200/mt ($817/mt) ex-warehouse on April 1, up by RMB 155/mt ($24/mt) as compared to March 25, according to SteelOrbis’ data.