The price trend in the hot rolled coil (HRC) market globally has been uneven this week as factors affecting the behavior of mills have varied from region to region. Following the return of European suppliers with higher offers affected by the surge in energy prices, Turkish mills have been trying to raise their domestic prices as well, providing opportunities for higher import offers, from Russia in particular. Meanwhile, Indian HRC suppliers have continued to face slow demand in most main destinations, expect for the Gulf region, where Indian exporters have managed to sell their materials at higher levels. In Asia, on the contrary, Chinese suppliers have announced another drop in their local and export prices, aiming to attract both domestic and foreign buyers.
Flats offers in the Turkish market have received a boost at the end of the week, but the price rise was caused by the increase in production costs, rather than by healthier demand. End-user activity remains limited even though there was some panic booking following the government’s decision to increase electricity and gas tariffs for industry by 50 percent. Some customers decided to restock, realizing that producers have a solid basis for bullish sentiment. As a result, by the end of the week local HRC offers in Turkey increased to $650-670/mt ex-works and up to $700/mt ex-works, versus workable levels of $610-630/mt ex-works previously. The new levels have not yet been accepted locally, while similar to the export segment market feedback lacks clarity. Earlier this week, the HRC export levels from Turkey were at $625-635/mt FOB, and by the end of the week some traders reported they had received $650-700/mt FOB. Next week, it may be clarified whether these levels will be accepted in the EU, where mills there have returned from the holidays with a significant price hike.
In Europe, most mills have decided to increase their prices for HRC following the increase announced by ArcelorMittal last week. Despite this, buyers are being extremely cautious, according to sources, as they fear end-users may not be able to bear high prices in the long term. In particular, this week workable prices have been evaluated at €760-820/mt ex-works, compared to €700-800/mt ex-works last week. More specifically, achievable prices are currently at €760-780/mt ex-works in Italy, up by €40-60/mt week on week, though most mills are targeting €800/mt ex-works. In northern Europe, the achievable price range is at €780-820/mt ex-works, up by €70/mt on average week on week. As for the import segment, trading activities have been very quiet, while more offers have been heard in the southern European market this week, with some indicating even slight increases. In particular, import HRC offers have been reported at €680-710/mt CFR, compared to €670-690/mt CFR last week. Ex-Japan offers have been reported at €680-700/mt CFR Italy, compared to €670/mt CFR last week. Besides, offers from Taiwan, South Korean and Vietnam have been voiced at €710/mt CFR Spain, while offers for ex-Turkey HRC have settled at €695/mt CFR Spain, including duty, this week.
Indian HRC prices have posted just small changes this week amid inactive market conditions, but buying interest from the Gulf region at slightly higher prices kept the market alive, although sales in other regions continued to remain challenging owing to bearish sentiments. Ex-India HRC prices are in the range of $575-595/mt FOB versus $575-585/mt FOB last week, but sellers were able to conclude only limited deals amid reports of a weakening of demand for boron-added material in Southeast Asia and the EU regions. Trade circles said that an aggregate 30,000 mt of ex-India SAE1006 HRC were sold for delivery to the Gulf at $640-645/mt CFR, which translates to around $590-595/mt FOB, and new offers from India have been voiced at up to $650-655/mt CFR.
In China, most exporters have continued to lower their prices this week given the ongoing declines in local and futures prices, coupled with tough competition with other foreign suppliers, especially in Asia. Export offers for boron-added SS400 HRC given by major Chinese mills are at $585-600/mt FOB for October shipment, with a midpoint at $592.5/mt FOB, which decreased by $12.5/mt week on week, At the same time, the tradable level for ex-China SS400 HRC has also declined over the past week to $540-570/mt FOB, depending on destination, compared to $555-580/mt FOB at the beginning of this week, and compared to $570-605/mt FOB last week. Domestic HRC prices in China are at RMB 3,870-4,000/mt ($560-579/mt) ex-warehouse on September 2, with the average price level RMB 135/mt ($19.5/mt) lower as compared to August 26, according to SteelOrbis’ data.
In Vietnam, most customers have continued to show very limited interest in HRC imports over the past week and, although most import offers for SAE1006 HRC have remained unchanged, while SS400 HRC offers, mainly from China, have dropped further, bids have fallen even more. Almost no offers for ex-China SAE1006 HRC have been heard in Vietnam this week, with the indicative level standing at around $610-615/mt CFR, down by $10-15/mt week on week. However, Chinese traders have been active in offering SS400 HRC, which resulted in the signing of numerous deals. In particular, this week market insiders have reported new contracts for at least 15,000 mt in total at $570-575/mt CFR, for October shipment, down by $15/mt week on week. Meanwhile, offers for ex-Taiwan SAE1006 HRC have been reported at $590/mt CFR for October shipment, the same as last week. However, customers’ bids have already decreased to $570/mt CFR. Offers for ex-Japan SAE1006 HRC and ex-India boron-added coils have been heard at $600/mt CFR. At the same time, some traders have been ready to offer materials at below $600/mt CFR, but no deals have been reported so far. As a result, the SteelOrbis’ reference price for import SAE1006 HRC in Vietnam has moved to $590-595/mt CFR, compared to $590-605/mt CFR last week,
