Despite the rebound seen in hot rolled coil (HRC) prices in China this week, other Asian suppliers have remained aggressive trying to maintain their presence globally. In particular, suppliers from Japan, South Korea, Taiwan and Vietnam have managed to sell sizable volumes of HRC to different destinations including India, Europe, and other countries, while China has posted increases during the week amid gains in futures prices in the country. Meanwhile, some markets like Turkey have been witnessing minimal business activity due to low end-user demand, with only occasional deals reported for ex-Russia materials.
The withdrawal of aggressive HRC offers from China has failed to support the price trend in Turkey’s import market. One of the reasons is that a Russia mill sold 20,000-30,000 mt at a rather low level of $520-535/mt CFR. Another factor is that offers in Turkey have settled at $620-640/mt ex-works for now, though the workable level is estimated at $5-10/mt lower. Accordingly, the prices of $590-600/mt CFR prices previously targeted by some Asian sellers will hardly be attractive in Turkey, given the narrow gap with domestic prices. This week, India has revised its offers down by $20-25/mt to $560-570/mt CFR in indications to several customers. China has remained at around $570-580/mt CFR with slightly lower levels available for large buyers. However, some sources believe that Chinese offers should be closer to $590/mt CFR due to the uptrend seen in China’s local market. The official export offers of Turkey have been at $620-630/mt FOB throughout the week. However, by the end of the week, some sources reported an offer to Italy for a sizeable lot at $600/mt CFR, which is an aggressive price for Turkish suppliers, but not low enough level for EU customers.
In Europe, most market insiders have continued to report slow transaction activity given the unclear price expectations. Meanwhile, the general range of prices in the EU market has settled at €630-670/mt ex-works, compared to €650-700/mt ex-works last week. In particular, the tradable level estimated by Italian mills has been voiced at €630-650/mt delivered, which translates to around €620-640/mt ex-works, down by €10/mt week on week. Meanwhile, HRC transaction prices have decreased in northern Europe as well, falling to €650-670/mt delivered for ex-Italian materials, while local prices have been heard at €630-650/mt ex-works. At the same time, import HRC prices have continued to decrease, with the most aggressive offers coming from Asia. In particular, import HRC offers in southern Europe have settled at €570-620/mt CFR, down by €10-30/mt week on week, with the lower end of the range corresponding to offers from Asia, South Korea, Taiwan, Japan and Vietnam to Italy, while the higher end of the range corresponds to offers to Spain. Asian suppliers have continued to be the most aggressive in the EU market, and, according to sources, lower offers and even some deals at €560/mt CFR have been also circulating in the Italian market.
Indian hot rolled coil (HRC) import trading has remained high on the back of steadily falling ex-Japan offers and local standalone re-rolling mills seizing the advantage of import sourcing over local bookings. Early last week, a local re-rolling mill concluded a trade for 40,000 mt of ex-Japan HRC $565-575/mt CFR in the west. Previously in early November, ex-Japan HRC was sold to India at $595/mt CFR. Moreover, later in the week, another re-rolling mill in India was rumoured to have sold 25,000 mt of ex-Japan HRC at $555-560/mt CFR, but this has not been confirmed and some sources said that it is too low for Japan. Though unconfirmed, trade circles have reported a trade for 15,000 mt of ex-South Korea HRC by a domestic mill for its captive rolling mill at the slightly higher price of $580/mt CFR. Vietnam has also sold 40,000-50,000 mt of HRC to India at around $550/mt CFR.
Indian HRC exporters have maintained their official price offers and some of them have remained absent from the export markets, while some are still considering lower prices amid the slowdown in domestic sales and rising inventories. Like earlier in the week, mills have kept official ex-India offers at $550-570/mt FOB levels, but the tradable level has been corrected to $520-545/mt FOB, with the midpoint at $532.5/mt FOB, against $520-560/mt FOB last week. According to sources, the only positive is the expected return of some buying interest in the region following the easing of ex-China offer volumes and Indian mills being aggressive in order to maintain a presence in the market and not completely exit it even at the cost of lower or negative margins from such overseas sales.
In Vietnam, prices for import HRC have continued to rise this week given higher offers from Chinese suppliers, who have been the most active sources of import HRC supply to Vietnam amid the better mood in China. The prices available for ex-China SS400 HRC have been voiced at $530-535/mt CFR, up by $5-10/mt over the past week, though some market insiders have reported some offers even at $545/mt CFR. Meanwhile, offers for ex-China SAE1006 HRC have settled at around $560-565/mt CFR this week, up by $5-10/mt since the beginning of the week and compared to $535-545/mt CFR last week.
Meanwhile, on November 17, Vietnamese steel producer Formosa Ha Tinh Steel announced new local HRC prices for January deliveries at $550/mt CFR for SAE1006 HRC (non-skin-passed) and at $555/mt CFR for skin-passed SAE1006 coils, down by $43-45/mt over the past month. In the meantime, given the weak consumption in Vietnam, HRC exports from Vietnam have been rebounding, with numerous deals signed to India, Europe and Pakistan. The reference price for import SAE1006 HRC in Vietnam has come to $555-560/mt CFR, from $550/mt CFR at the beginning of the week and compared to $535-540/mt CFR last week.