The mood and price trends for hot rolled coil (HRC) globally have been demonstrating a certain pessimism this week. The overall market situation in Asia has remained negative with prices going down due to the aggressive policies of Chinese traders and mills, while in India sellers have decreased their offers due to rising competition with other suppliers in key markets like Europe and the Middle East. In Turkey, most buyers have been rather cautious in terms of new bookings, though several bookings of cheap HRC from China have been reported by the end of this week.
This week has brought another fall in ex-China HRC offers following the decreases in futures and local HRC prices. Export offers for boron-added SS400 HRC given by major Chinese mills are at $630-660/mt FOB mainly for June shipment, with a midpoint at $645/mt FOB, down by $20/mt week on week. At the same time, according to sources, smaller mills have been offering at around $615-520/mt FOB. Meanwhile, the tradable level for SS400 HRC has dropped to $580-620/mt FOB, from $585-620/mt FOB at the beginning of the week and versus $600-635/mt FOB at the end of last week. The lower end of the range corresponds to offers in Vietnam, coming at $590-600/mt CFR, versus $620/mt CFR at the beginning of last week. Several deals have been signed with Vietnamese buyers at $590-600/mt CFR, while bids have dropped to $580/mt CFR. Furthermore, Chinese traders have sold their SS400 HRC to Pakistan at around $625/mt CFR, down by $20/mt week on week. At the same time, Chinese suppliers have also continued to decrease their offers for higher-priced destinations, though trade has remained slow. In particular, offers for ex-China Q195 HRC have been voiced in Turkey at $655-660/mt CFR, down by $20-25/mt week on week, while by the end of the week a deal for 30,000 mt have been reported at $647/mt CFR Turkey. Offers to the Middle East, the UAE in particular, have been reported at $650-670/mt CFR, compared to $680-685/mt CFR last week. Domestic HRC prices in China are at RMB 4,180-4,300/mt ($610-628/mt) ex-warehouse on April 13, with the average price level RMB 60/mt ($9/mt) lower compared to that recorded on April 6, according to SteelOrbis’ data.
Prices for HRC in the Vietnamese market have continued to decrease this week, with suppliers from China being the most aggressive. More specifically, at the beginning of this week market insiders reported several deals signed for ex-China SS400 HRC through traders at $600/mt CFR, compared to $620/mt CFR at the end of last week. However, by the end of the week new transactions have been reported at $590/mt CFR, while buyers’ bids have been heard at levels of $580/mt CFR, down by $10/mt since the beginning of the week. Ex-China SAE1006 HRC offered by traders has been heard in Vietnam at $640-650/mt CFR, down by $10-20/mt over the past week. Other suppliers, like those from India and Taiwan have continued to stay away from the Vietnamese market, with only new offers for ex-Japan SAE1006 HRC reported to be coming at $680/mt CFR, down by $20/mt week on week. The SteelOrbis reference price for import SAE1006 HRC has remained at $640-650/mt CFR, the same as at the beginning of this week and compared to $660/mt CFR at the end of last week.
Meanwhile, on Friday, April 14, Vietnamese steel producer Formosa Ha Tinh Steel (FHS) announced new local prices for rerolling grade SAE1006 HRC (non-skin passed) to local customers at the level of $682/mt CFR this month, down by $45/mt month on month, while offers for skin-passed SAE1006 HRC have decreased for June by $40/mt to $692/mt CFR. Offers for SS400 HRC have settled at $687/mt CFR, down by $40/mt over the past month. However, despite the recent fall, prices from Formosa are still high for most local customers given more competitive offers coming especially from China.
Ex-India HRC prices have been pulled down due to rising competition from cheaper alternatives and by buyers in key markets like Europe reducing activity in the local market. The SteelOrbis reference price for ex-India SAE1006 2 mm HRC has come down to $680-750/mt FOB with the midpoint at $715/mt FOB. The higher end of the range has gone down by $20/mt over the past week, reflecting the weakening seen in the EU. Though official offers have been reported in the range of $720-740/mt FOB, the tradable levels in all markets except Europe have been below the $700/mt FOB mark. Sources said that comparatively higher prices are still achievable in Europe (up to $750/mt FOB), although for lower volumes, while deal prices have been lower for sales concluded in the MENA region. A deal for a relatively small volume of ex-India HRC for delivery to Egypt has been reported at $690/mt FOB, sources said. In the UAE, offers for ex-India coils for both May and June shipments have been at $720-740/mt CFR, translating to $685-705/mt FOB. In addition to lower demand during Ramadan, interest in ex-India coils have been disrupted by far lower ex-China offers, which have been heard at $650-670/mt CFR.
Most European HRC producers, both in the north and south of the region, have been offering their HRC at around €850-870/mt ex-works for July and some for August deliveries, citing their limited allocations. However, European distributors have been expressing their fears regarding the future price direction amid weak end-user demand and the bearishness in the import segment. According to sources, the tradable HRC price level in Italy has been estimated by local customers at €845/mt ex-works on average, down by €5/mt week on week, while the workable prices in northern Europe have been reported at around €850-860/mt ex-works, compared to €860/mt ex-works last week. In the meantime, import HRC prices in southern Europe have shown a sharp drop this week, falling to €715-750/mt CFR, versus €750-800/mt CFR last week. The lower end of the range corresponds to offers for ex-India HRC from second-tier mills at around $785/mt CFR (or €715/mt CFR), while other Indian suppliers have been voicing their offers at around $800/mt CFR (or €726/mt CFR), compared to offers at €760/mt CFR last week. Besides, according to sources, a deal from an Indian second-tier mill has been heard in Italy this week at as low as $750/mt CFR, which translates to around €680/mt CFR, though this information has not been confirmed by the time of publication. Offers for ex-Asia HRC have been reported at €735-750/mt CFR, down by €15-30/mt week on week, depending on the supplier, with offers from Indonesia and Vietnam standing at €735-745/mt CFR, while offers for ex-Japan and ex-South Korea have settled at around €745-750/mt CFR southern Europe. ($1 = €0.91)
The lack of sales and aggressive import offers have resulted in weaker HRC pricing in Turkey this week. Even though an Iskenderun region-based producer is not yet fully back in the market and is still working on its production, demand is still less than supply. And while several weeks ago Turkish mills were comfortable offering for June-July deliveries and not providing discounts, today they feel the pressure on their prices. As a result, according to sources, domestic HRC offers in Turkey have decreased from $800-810/mt ex-works to $780-790/mt ex-works and some buyers’ bids are even lower. As regards exports, some mills are at $750-760/mt FOB, while others are at $770-780/mt FOB, down from $780-800/mt FOB seen earlier this week. In the import segment, China remains the most aggressive with $650-665/mt CFR offers for Q195 material, down around $15/mt over the past week. According to sources, a 30,000 mt lot was booked this week at $647/mt CFR and similar levels are targeted by other suppliers of Chinese materials.
In the UAE, even though import offers have continued to soften, trade activities in the UAE have still remained sluggish due to Ramadan and the upcoming Eid holiday. Accordingly, ex-China June shipping SS400 grade HRC offers have dropped by $30/mt from the previous week to $650-670/mt CFR. Meanwhile, smaller Indian mills have chosen to offer HRC at $720-730/mt CFR, while larger mills continue to attempt higher prices at $735-740/mt CFR for May-early June shipments, since that last week's offers came down by $10-25/mt. Furthermore, South Korean HRC offers for June and July shipments have been made at $740/mt CFR.
