The increased number of hot rolled coil (HRC) offers, mainly from China and other Asian countries, has continued to trigger price declines in most regions globally. In particular, while in Vietnam the size of discounts provided by Chinese traders has resulted in significant drops in workable prices, more offers for ex-Asia HRC have been heard in Turkey and the Middle East. At the same time, suppliers from India have been forced to go lower as well given tighter competition with Chinese sellers. However, offers for ex-India HRC to Europe have been relatively stable considering the stability of domestic quotes at high levels in the region.
This week once again started with another drop in both futures and local HRC prices in China. Thus, ex-China HRC offer prices have declined over the past week both from big Chinese mills and traders, while more bids have been heard at lower levels this week, especially in Asia. Export offers for boron-added SS400 HRC given by major Chinese mills have come down to $655-675/mt FOB, with a midpoint at $665/mt FOB, down by $5/mt week on week. At the same time, smaller mills have been offering their materials at around $625-640/mt FOB, down by $5-20/mt, depending on the mill, over the past week. Furthermore, by the end of the week, several mills such as Shagang Steel and Shangang Rizhao Steelworks have dropped their offers by $5-10/mt to $650/mt FOB. At the same time, following the decrease in the tradable level for ex-China SS400 HRC to $610-640/mt FOB at the beginning of the week, some Chinese traders, who avoid taxes by practicing non-VAT trade, have decreased their offers to around $595-600/mt FOB in Vietnam. Meanwhile, after a deal for 15,000 mt ex-China HRC was reported in Turkey at $645/mt FOB (or around $675-685/mt CFR), ex-China offer have dropped to around $665-675/mt CFR Turkey, while customers in the Middle East have received ex-China offers at $680-685/mt CFR, with several deals reported at the abovementioned level. Meanwhile, ex-China offers for SAE1006 HRC have decreased in Vietnam by the end of this week to $660/mt CFR compared to $675-680/mt CFR at the beginning of the week. Domestic HRC prices in China stood at RMB 4,270-4,330/mt ($621-630/mt) ex-warehouse on April 6, with the average price level RMB 115/mt ($17/mt) lower compared to March 30, according to SteelOrbis’ data.
Chinese suppliers, especially traders have kept dropping their HRC offers, have been trying to sell short in Vietnam this week. According to market insiders, several deals were reported at $615-618/mt CFR at the beginning of this week, while by the end of the week the material has changed hands at $605/mt CFR, and most bids have fallen to $597-600/mt CFR. Meanwhile, offers for ex-China SAE1006 HRC have been rare in Vietnam, with the indicative level standing at $660/mt CFR, versus $660-670/mt CFR at the beginning of the week and down by $20-30/mt from last week.
In the meantime, this week, the second-largest HRC producer in Vietnam, Hoa Phat Group, announced its new local prices for HRC for shipments in May and June, dropping them slightly by around $7-8/mt month on month. However, according to market insiders, the price decrease is smaller than initially expected given HRC offers from Chinese suppliers, especially from traders. In particular, the new prices from Hoa Phat Group for SAE1006 and SS400 HRC for shipments in May and June have settled at VND 16,000-16,030/mt ($682-683/mt) CIF, where the lower level corresponds to the price in northern and central Vietnam, with the higher price in the south. Current prices are VND 300-330/mt lower than last month, but down by $7-8/mt on dollar basis due to changes in the exchange rate.
The SteelOrbis reference price for ex-India SAE1006 2 mm HRC has settled at $680-770/mt FOB, with the midpoint at $725/mt FOB, versus $720-770/mt FOB last week. The higher end of the range has remained stable as offers to the European market and the latest deals were stable at $820-840/mt CFR. However, in most other outlets ex-India coil prices have posted decreases amid increasing competition with Chinese suppliers and weak sales. Offers for ex-India coils to Turkey have been coming at $730/mt CFR, which translates to around $690-700/mt FOB. In the UAE, mills have been ready to deal at $735-740/mt CFR or $700-705/mt FOB. The lowest level for ex-India HRC has been at $680/mt FOB as the indicative price for Vietnam from India was at $700/mt CFR.
No improvement has been seen in Turkey’s HRC market this week due to extremely low trading activity and the negative outlook for the coming couple of weeks. Moreover, the prices in all segments have declined, but have for now failed to trigger livelier demand. Particularly, re-rolling companies in Turkey have reported their very low levels of sales, while their feedstock inventories are quite high and so they are not in need of urgent restocking. In addition, the upcoming election and related expectations are slowing down business since people are cautious regarding possible financial and political risks. Over the past week, local HRC prices have decreased by around $10-20/mt to $810-840/mt ex-works, although the level of $800/mt ex-works has also been circulating in the market. In the import segment, offers from China decreased to $660-675/mt CFR for Q195 and $685-700/mt CFR for SAE1006, while last week the offers were at least $15/mt higher. Russia is indicating $720-730/mt CFR in rare offers, while both India and South Korea have decreased their prices considerably over the past week to $730-740/mt CFR. Still, despite the reduction, the level is not workable due to far more aggressive offers from China.
In UAE, as China continues to reduce HRC export offer prices, there has been some interest in importing HRC, although end-user demand in the UAE has been quiet as Ramadan continues. As a result, 5,000-10,000 mt of 3mm HRC from China has been booked at $685/mt CFR to the UAE, whereas another deal was recently heard for 7,000 mt of 2-2.5 mm S235JR material to the UAE at $720/mt FOB. Also, current offers for SS400 from China to the UAE have decreased by $10/mt to $680-700/mt CFR for May shipments. On the other hand, some Indian suppliers have maintained the same levels of $745-750/mt CFR for shipments in late May or early June, but these levels are not seen as feasible, so, according to other sources, certain suppliers have offering at $735-740/mt CFR. Yet, most mills are still not offering to the UAE due to the better trade at higher prices in other markets. Furthermore, due to the unfavorable mood, South Korea is still not offering, though ex-Japan offers for Q235B of 3 mm and above have been reported at $690/mt CFR for May shipment.
HRC prices have remained strong in the EU market this week. However, sentiments have been rather mixed given on the one hand local producers’ plans to further increase their offers, while on the other hand the global market is rather turbulent given the recent price drops for ex-Asia materials. In particular, domestic prices in the EU HRC market have been estimated at €850-890/mt ex-works, versus €850-870/mt ex-works last week, with the official HRC offers from Italian mills standing at €860-880/mt ex-works, up by €10/mt week on week, while the tradable price level is still estimated by some buyers at €850/mt ex-works. In northern Europe, the situation has been very similar, with mills’ offers heard at €870-890/mt ex-works, up by €10-20/mt week on week, but, according to market insiders, workable prices have been heard at around €860/mt ex-works. Meanwhile, import HRC prices in southern Europe have settled at €750-800/mt CFR. While most suppliers have maintained their offers stable at high levels, some Asian suppliers have decided to go slightly lower. In particular, offers for ex-Vietnam HRC have been voiced at €750-770/mt CFR, versus €770/mt CFR last week. Meanwhile, following several deals for ex-Japan HRC at €770-780/mt CFR last week, a few small batches are reported to have been signed at the same level in Italy this week, while most ex-Japan offers have been heard at €770-790/mt CFR. Besides, suppliers from Indonesia have maintained their offers at €760-765/mt CFR, while offers from Taiwan and South Korea have settled at €770/mt CFR and €780/mt CFR, respectively, down by €10/mt on the higher end of the range week on week. At the same time, offers for ex-India materials have been voiced at mainly €760-770/mt CFR Italy and at around €770-780/mt CFR Spain, reflecting the same level as last week.