The increased number of hot rolled coil (HRC) offers, mainly coming from China after its return from its long holiday, has triggered price declines in many regions. In particular, while in Vietnam and Pakistan the size of discounts provided by Chinese suppliers has resulted in significant drops in workable prices, more offers for ex-China HRC have also been heard at lower levels in Turkey and the Middle East, but have not been converted into deals so far. In Europe, the price downtrend in the HRC market has not yet come to a halt, as trading activity has remained muted amid slow demand. At the same time, suppliers from India have been the only ones still refusing to give any discounts, maintaining their prices at strong levels.
This week, Chinese HRC suppliers have returned from their long holiday, decreasing their offers given the lack of significant support from futures and local HRC prices and increasing inventories in China. Export offers for boron-added SS400 HRC from large Chinese mills have settled at $540-545/mt FOB, with the midpoint at $542.5/mt FOB, down by $15/mt over the past two weeks. Meanwhile, the tradable SS400 HRC prices have been voiced at $515-540/mt FOB, depending on the destination, versus $530-550/mt FOB before the holiday, though most customers believe deals will be signed at levels not higher than $530/mt FOB. Offers for ex-China Q195 HRC in Vietnam have been voiced at $520/mt CFR, versus $525-530/mt yesterday and down by $10-20/mt over the past two weeks, while offers for SS400 HRC have been reported at $525-530/mt CFR, down by $15/mt. Ex-China SS400 and Q195 HRC deal prices in Pakistan have been voiced at $540/mt CFR for November shipment, down by $15/mt over the past two weeks. Furthermore, Chinese HRC offers in the Middle East and Turkey have been reported at around at $565-570/mt CFR, compared to offers at $580/mt CFR initially voiced at the beginning of the week.
In Vietnam, quite a negative mood has been prevailing in the import HRC segment after China’s return, as most offers for ex-China Q195 HRC in Vietnam have been voiced at $520/mt CFR, versus $525-530/mt yesterday, October 12, and down by $10-20/mt over the past two weeks, while offers for SS400 HRC have been reported at $525-530/mt CFR, down by $15/mt. As for SAE1006 HRC, offers have been extremely rare this week, with buyers estimating the tradable prices at $555-560/mt CFR, and so the reference price for imported SAE1006 HRC has lost $10-13/mt over the past week.
Ex-India HRC prices have remained in the range of $590-620/mt FOB, the same as last week, with no contacts reported so far, amid most mills’ still minimal interest in export sales due to good local order books. Sources said that the new export tariff quotas in the EU, effective from October 1, applicable for shipments from India, were exhausted over a period of two to three working days, resulting in offers failing to elicit any response. Meanwhile, at least two officials at large private mills confirmed they are starting talks on long-term supply contracts with buyers in the UAE and Europe.
In Europe, the price downtrend in the HRC market has not yet come to a halt within the past week, as trading activity has remained muted amid slow end-user demand and sufficient stocks among distributors, with no sizable restocking activity reported so far. The general tradable price range in the EU HRC market is currently at €585-630/mt ex-works, versus €610-630/mt ex-works last week, with the lower end of the range corresponding to occasional deal prices in Italy, while the higher end corresponds to northern European price ideas. More specifically, while most offers for local HRC have been estimated at €600-610/mt ex-works in Italy this week, according to sources one of the Italian mills has accepted to sell its materials at around €585/mt ex-works. In northern Europe, most customers estimate the tradable level at €600-610/mt ex-works, down by €20/mt week on week. Meanwhile, import HRC offers have been voiced at €580-615/mt CFR, versus €585-635/mt CFR last week, while the interest in import coils has remained minimal due to the narrowing gap between domestic and import prices, coupled with longer lead times for all foreign materials.
The general sentiment in Turkey’s flats market has weakened this week, mainly due to still slow sales, but also due to the fact that China has returned fairly negatively from its holiday period. The initial offers for ex-China HRC were at $565-575/mt CFR for Q195 of 3 mm and higher, but by the end of the week they have softened to $560-570/mt CFR for November shipments. Prior to the holiday, Chinese offers stood at around $570-575/mt CFR and up to $580/mt CFR. No fresh deals have been reported as some buyers are targeting $5-10/mt discounts, while others believe that local HRC prices in Turkey may soften further and so there is no rush to book on the import side. Along with China, there have been offers from South Korea at $595-605/mt CFR, down from $610-615/mt CFR two weeks ago. In the Turkish domestic market, mills’ official offers are at $640-660/mt ex-works base for November-December deliveries. The buyers, however, estimate the workable levels at around $610-620/mt ex-works base for large volumes and maybe at $625-635/mt ex-works base for smaller volumes. Overall, local prices in Turkey are expected to soften, but a majority market players do not anticipate a sharp downtrend. The main reason is the increased production costs for Turkish mills due to higher energy tariffs and high coal prices.
In the UAE, no fresh trading activities have been reported during this week, possibly because of earlier purchases which make stocks sufficient. However, once China returned from its holiday period, hot rolled coil (HRC) offers improved slightly, but Emirati customers kept pushing to obtain and purchase at low prices. With the minor increase in Chinese offers, other suppliers, particularly South Korea, offering at the same levels as last week, hinted that increases in GCC offerings could potentially be observed in the coming days. As a result, current Chinese offers to the UAE for SS400 have risen by $10/mt to $580-590/mt CFR for shipments in November and December, while Emirati purchasers expect offers at around $570/mt CFR. However, according to some market reports this week, certain Chinese suppliers are providing commercial grade SS400 and Q195 to the UAE at $555-560/mt CFR. In the meantime, South Korean suppliers have chosen to maintain their previous offers of $590/mt CFR for shipments to the UAE in November and December. India, on the other hand, has been silent in its HRC proposals because its local market remains the best option for business activity.