Hot-rolled coil (HRC) prices globally have maintained their downward trend and sentiment in most markets have remained largely negative. In particular, the demand-supply imbalance in the European market has once again brought workable prices down, while imports remain limited. In Turkey, despite limited competition in the import segment, prices have still weakened since the end of November, mainly due to slower business amid currency fluctuations and limited export activity. In Asia, business has remained slow in Vietnam with bids having dropped even further this week, putting pressure on India-based sellers specifically. In addition, some softening in local prices in China has put additional pressure on the HRC market sentiment in Asia.
- CIS-based HRC exporters are almost sold for their January allocations, partly as the available volumes from Russia were limited due to the absence of MMK. The supplier had earlier traded big lots to the Asian markets and has also concentrated more on local sales. The export prices in the most recent sales have settled at around $785-815/mt FOB Black/Azov Sea depending on the supplier and the sales outlet. In the Baltic region, the Russia-based supplier has been selling at $910-950/mt FOB, with around 50,000 mt out of the initially planned 70,000-80,000 mt for January production.
- In Turkey, local prices have dropped by around $20/mt to $850-870/mt ex-works base for February deliveries. As regards exports, levels $10-20/mt lower have been heard, taking into account the silence in the EU market and the temporary lull in the business to North Africa. In the import segment, the latest prices have been ranging at $815-835/mt CFR depending on the destination, although some bids were already reported at $800/mt CFR and below.
- In the European HRC market, a negative mood continues to prevail since there is still a bit of excess supply due to the lower purchases by the automotive sector. As a result, the domestic workable prices have declined by €15/mt on average over the past week to €850-900/mt and to €910-960/mt respectively in the Italian market and in northern Europe, both ex-works. Taking into account the supply situation locally, EU-based buyers have not been much interested in buying imports, especially in southern Europe. However, over the past week around 50,000 mt of HRC were sold from Russia to the north of Europe. It is worth mentioning though that some of the HRC exporters have started reporting that they are receiving more active inquiries from the EU, which makes them believe the market in Europe may rebound soon. However, most hopes are placed on ex-EU exports to the US, which may support prices and cool off the supply situation, but these are expected to start not earlier than January, SteelOrbis understands.
- India-based HRC exporters have been under pressure to move their volumes abroad, taking into account the low bids from their regular outlets, which were found by the mills unacceptable. The sellers provided $10-15/mt discounts over the past week to $770-815/mt FOB. In Vietnam, no business has been reported from India as bids are at least $5-15/mt lower that the lowest ex-India offers. In Turkey, offers from India have been mainly at $850/mt CFR but, according to some sources, the negotiations were at $835/mt CFR by the end of the week, with no deals reported.
- Ex-China SS400 HRC offer prices from mills have moved sideways in the past week at $800-820/mt FOB and trading in the export market has slowed down, while the situation in the local market has continued to improve in the first half of the week.
But the local Chinese market has started to weaken again on Thursday and Friday, resulting in week-on-week decline of average prices by RMB 40/mt ($6/mt) to RMB 4,765/mt ($748/mt) ex-warehouse on Friday, December 10, according to SteelOrbis’ information. This has put additional pressure on sentiment in Vietnam’s import market.
- The reference price for import SAE1006 HRC in Vietnam has been lowered again by the end of this week, to $800-805/mt CFR, down by $10-15/mt from the level seen on Monday and $20-25/mt below late November. Trading has been muted this week as traders have been cutting offers further, consumption has been subdued, and the market has been waiting for the local price announcements. In December, market players expect that Formosa Ha Tinh will drop prices by $40/mt to around $840/mt CFR, but some re-rollers have been waiting for a sharper fall as the situation in the import segment has weakened further by the end of the week. Some traders, having a negative outlook, have been heard to be ready to provide $780-790/mt CFR for HRC for shipment in February and beyond.
