The first week of November has turned out to be somewhat turbulent in terms of hot rolled coil (HRC) prices coming from China to many regions, with significant discounts at the beginning of the week and then at higher levels by the end of the week amid the rebound in futures prices in China. More specifically, numerous offers which resulted in some deals for cheaper ex-China HRC have been reported in many regions globally, such as Vietnam, the Middle East and Turkey. Besides, other Asian suppliers, like those from Japan have followed the trend, selling their materials at lower levels to different destinations, to India and southern Europe in particular. However, given the recovery in futures prices seen at the end of the week in China, global prices for HRC have also rebounded to last week’s levels, making the mood more optimistic for the next round of bookings.
In China, at the beginning of the week HRC export offer prices moved down amid the prevailing bearish sentiments and big declines seen in local and futures HRC prices. In particular, export offers for boron-added SS400 HRC given by major Chinese mills have dropped to $520-535/mt FOB, mainly for December shipment, with a midpoint at $527.5/mt FOB, down by $22.5/mt over the past week. At the same time, at the beginning of the week, the tradable level for ex-China SS400 dropped to $475-520/mt FOB, from $505-530/mt FOB last week, but have rebounded to $495-540/mt FOB by Friday. The rebound is explained by the increase in ex-China HRC futures prices, which by Friday, November 4, have gained RMB 185/mt ($26/mt) since Monday, October 31, and are up by RMB 110/mt ($15/mt) over the past week, reaching RMB 3,640/mt ($502/mt) for delivery in January. Meanwhile, domestic HRC prices in China are at RMB 3,660-3,820/mt ($505-527/mt) ex-warehouse on November 4, with the average price level RMB 35/mt ($5/mt) higher as compared to October 28, according to SteelOrbis’ data.
In Turkey, HRC buyers continue giving priority to import offers, which have remained quite aggressive and competitive. Ex-China workable prices have fallen to as low as $550/mt CFR for 50,000 mt vessels, while previously the deals for large lots were closed at $560-570/mt CFR, as SteelOrbis reported. By the end of this week, ex-China offers have rebounded to $570-580/mt CFR, following an upturn in futures prices in China. Other Asian suppliers have been in the market with $590/mt CFR offers for December shipments, and only India has been offering at $590-600/mt CFR. Russia, according to sources, sold up to 30,000-40,000 mt of HRC to Turkey last week at $565-580/mt CFR for shipments with short lead times. While some market activity has been seen in the import HRC segment, the demand for the local origin HRC has been slow. Turkish mills have been offering at $650-680/mt ex-works, although some sources believe the producers may attempt to return to $680-700/mt ex-works in their offers.
In Vietnam, following significant decreases in HRC import offers seen at the beginning of this week, by the end of the week signs of rising prices have emerged as Chinese exporters, have increased their offers given the better mood in China. In particular, by Friday, November 4, offers for ex-China SS400 HRC have settled at around $510/mt CFR, compared to deal prices at $490-495/mt CFR in the middle of the week, down by $25/mt week on week. Ex-China SAE1006 HRC prices, which have decreased in new deals to as low as $510/mt CFR, down by $20-40/mt week on week, by Friday have also rebounded, to $520-540/mt CFR. Meanwhile, offers for SAE1006 HRC from Japan and Taiwan have been voiced at around $540-550/mt CFR, down by $10-20/mt week on week. However, according to market insiders, talk about a deal for 5,000/mt of ex-Taiwan SAE1006 HRC at $510/mt CFR has been circulating in the market this week. Thus, the reference price for import SAE1006 HRC in Vietnam, based on the most competitive offers, has come to $520-540/mt CFR, compared to $510-520/mt CFR in the middle of the week, but down by $20-30/mt week on week.
Despite the strengthening of the US dollar and the crunch in import financing from lenders, competitive ex-Japan, ex-Russia and ex-Vietnam offers have continued to drive sales in the Indian hot rolled coil (HRC) market. More specifically, it has been confirmed by trade circles that a stand-alone Maharashtra-based re-rolling mill has concluded a trade for ex-Japan HRC totaling 20,000 mt at $600/mt CFR. The same re-rolling mill also concluded another deal for 15,000 mt ex-Japan HRC for December delivery, reportedly at the slightly lower price of $590-595/mt CFR, the sources said. Furthermore, Russia has also emerged as a preferred sourcing origin for India HRC importers. Over the past week, two bookings of ex-Russia HRC have been reported by trading firms for 5,000 mt and 8,000 mt for end-of-November delivery, at $565/mt and $570/mt CFR, respectively. Another deal for at least 5,000 mt of ex-Vietnam HRC has been reportedly signed by the biggest Vietnamese mill at $590-592/mt CFR India.
In Europe, the official positions of European steel mills have remained mainly unchanged this week, with persistently high offers, standing at €700/mt ex-works, and some at even €720/mt. However, the real market situation has continued to be stably pessimistic, with tradable prices estimated at the same level as last week at €650-670/mt ex-works both in southern and northern Europe, though some customers have even been reporting HRC offers at as low as €630-640/mt ex-works. As for import prices, offers from almost all main suppliers to southern Europe have dropped to €620-640/mt CFR, compared to €620-660/mt CFR last week. This decrease is mainly explained by the drop in HRC prices in Spain, while in Italy import prices have remined relatively unchanged.