The global hot rolled coil (HRC) market has weakened this week, with prices slipping across most major regions amid deteriorating sentiment and limited buying interest. In Asia, ex-China HRC prices have reversed last week’s gains as both the Chinese domestic market and futures prices in China have continued to soften. Vietnam has seen another week of declines, driven by lower ex-India deal prices, renewed downward pressure from other Asian suppliers and Formosa’s decision to cut its domestic HRC offers. Meanwhile, Indian exporters have also reduced prices as competitive pressure intensified, especially due to cheaper transactions in Vietnam and slower demand in the Middle East. In Turkey, HRC prices have remained mostly stable, although Chinese offers have edged slightly lower, reflecting the broader regional downturn. The UAE market has experienced a slowdown as well, with buyers remaining cautious and suppliers trimming offers further in an effort to stimulate interest. In Europe, domestic HRC prices have remained firm, but trading activity has stayed weak as buyers have remained hesitant amid high stock levels and slow demand. Market anxiety has increased following the EU CBAM committee’s vote to approve benchmark and default emission values, a move that has raised concerns among traders and importers.
Chinese HRC market has turned negative this week, with both HRC domestic and futures prices slipping and dampening sentiment among Chinese exporters. As a result, most ex-China HRC offers both from mills and traders have been rolled back this week, while overall trading activity has remained slow. Specifically, the price range for boron-added SS400 HRC from large Chinese mills has been estimated at $465-480/mt FOB, with a midpoint at $472.5/mt FOB, down by $2.5/mt week on week. Meanwhile, offers from smaller private mills have been voiced mainly at $460-468/mt FOB, compared to $465-475/mt FOB last week.
At the same time, while offers from most Chinese traders have settled at $455-465/mt FOB, down by $10/mt week on week, according to sources offers from non-VAT traders have been voiced at $445-455/mt FOB, compared to $450-455/mt FOB last week. As of December 12, HRC futures at Shanghai Futures Exchange are standing at RMB 3,232/mt ($457.5/mt), moving sideways since December 5, while declining by 0.83 percent compared to the previous trading day, December 11.
In Vietnam, as expected, import HRC indications have softened this week. Besides, some occasional deals for ex-India material are reported to have been concluded at even lower levels, as Indian suppliers have continued to provide the most competitive discounts in the market. Import offers for ex-China Q235 2,000 mm HRC in Vietnam have been voiced at $470-472/mt CFR, compared to $478/mt CFR last week. Besides, indicative offers for ex-China SAE1006 HRC have been estimated at $485/mt CFR, down by $10/mt week on week. The most competitive offers for SAE1006 HRC have been voiced from Indian suppliers at $480/mt CFR, down by $5-10/mt week on week. Besides, following a deal for around 30,000mt of ex-India HRC signed at $480-482/mt CFR Vietnam for January shipment last week, this week another deal for around 20,000 mt has been signed at $478/mt CFR, while talk about one more deal for around 40,000 mt signed at $475/mt CFR has been circulating in the market, which translates to around $455-457/mt FOB.
In the meantime, local producer Formosa Ha Tinh Steel (FHS) has revised its domestic offers for non-skin passed SAE1006 and SS400 HRC down by around $15/mt month on month to $492-502/mt CIF, depending on the order size.
Ex-India HRC prices have slipped over the past week in several key destinations, including the Middle East. Specifically, ex-India HRC offers in the Middle East have been voiced at levels in the range of $480/mt FOB, down by $5-10/mt week on week. Besides, according to sources, a deal for around 15,000 mt is reported to have been signed at $498/mt CFR UAE at the end of last week, while the initial offer was at $505/mt CFR. At the same time, talk of lower ex-India HRC offers has persisted in Vietnam, where market rumours suggest that more transactions may have been concluded at reduced price levels or around $475-478/mt CFR. Meanwhile, in Europe ex-India HRC indicative offers have been estimated at $520/mt FOB and above, the same as last week, which translates to around $575/mt CFR. However, although most buyers have remained cautious owing to weak demand and have preferred to avoid risks of trade barriers including the impending carbon tax, rumours about an ex-India HRC deal signed for a big batch at an extremely discounted price of around $500-510/mt CFR, which translates to around €427-435/mt CFR Italy, has been circulating in the market this week, but this information has not been officially confirmed by the time of publication.
As a result, the SteelOrbis reference price for ex-India SAE1006 HRC has moved to $455-520/mt FOB, down by $10/mt on the lower end of the range due to the lower prices for Indian coils reported in Vietnam.
HRC prices in Turkey have settled at $555-565/mt ex-works in the domestic market, and, according to the buyers, some mills are ready to provide $5/mt discounts. The volumes are mainly available for February deliveries. Export offers are at $540-555/mt FOB, but trade has remained rather slow given the cautiousness of European customers. HRC offers from Turkey to the EU have been reported at €520/mt CFR including AD tax or €600-620/mt DDP. Import offers from China have softened this week since some traders have restarted offering non-VAT cargoes - at $471-474/mt CFR. Regular offers for re-rollers have been set at $480/mt CFR at the end of the week, with offers for pipe-makers at $515-520/mt CFR. Sources expect some deals to be concluded since the price level is considered quite workable. HRC offers from Russia have been at $475/mt CFR from the sanctioned mill and at around $485/mt CFR from the non-sanctioned mill. The latter level indicates a decrease of $5-10/mt from last week. Egypt is in the market with $560/mt CFR for February shipments, with the latest sale closed at $557/mt CFR for around 3,000 mt as a top-up to a cargo. The Malaysian supplier is offering at $545-550/mt CFR for March shipment, but the lead time is too long for the time being.
In the UAE, import interest has continued to be seen among Emirati buyers, and some small purchases from China have been reported this week. However, as import offers have started to decline, buyers remain cautious and are closely evaluating the market before committing to larger volumes. According to sources, a few small lots have been purchased at even lower levels around $475-480/mt CFR for January shipment, while Chinese suppliers have reduced their SS400 HRC offers by about $5/mt, now at $485-500/mt CFR. Indian mills have also lowered their offers, which are currently reported at $490-505/mt CFR for January shipment, down from last week’s $500-515/mt CFR. The softer pricing attracted renewed interest from Emirati buyers, leading to the booking of roughly 15,000 mt at $505/mt CFR toward the end of last week. Similarly, Japanese suppliers have adjusted their January shipment offers downward, reducing prices by $10/mt week on week to $485-490/mt CFR. However, no new deals have been concluded so far.
EU domestic HRC prices have remained stable at high levels across the region over the past week, even as trading activity in both northern Europe and Italy continues to lag behind amid elevated stock levels and persistently slow demand. Specifically, local mills in northern Europe have kept targeting €630-650/mt ex-works for new orders for January and February deliveries, the same as last week, while in Italy mills have been targeting €620-630/mt for January delivery, up by €10/mt on the lower end of the range week on week. Meanwhile, the tradable price levels for January delivery coils in northern Europe have been estimated at €610-630/mt ex-works, up by €10/mt on the higher end of the range week on week, while the tradable price level for January delivery in Italy has been estimated at €600-620/mt ex-works, compared to €590-610/mt ex-works last week. Import offers have also remained relatively steady, with some suppliers attempting slight upward adjustments for cargoes on both CFR and DDP basis, yet actual trading has been close to non-existent due to ongoing CBAM-related uncertainties. Indicative offer prices for HRC have settled at €490-520/mt CFR, up by €5/mt on the lower end of the range, while HRC import offers including CBAM costs on DDP basis have been voiced at €595-610/mt levels, depending on the supplier, up by €15/mt on the lower end of the range week on week. Adding to the market’s hesitation, the European Commission has now approved the use of benchmarks and default emission values - key instruments for implementing CBAM - and the reaction among market participants has been sharply negative. For several origins, the newly adopted default values appear higher than those indicated in earlier leaked drafts, significantly increasing the projected cost of these imports.