In the last week of July, HRC prices globally have been on the rise, led by stronger Chinese quotes, but despite the midweek hikes in China, futures slipped again by the end of the week, raising doubts over the sustainability of a further strong uptrend. The divergence in price expectations between mills and buyers has been highlighting the fragility of the current rebound. While Asia — led by China — has been the main driver for upward movement, sentiment in other regions like those in the Middle East and Europe has remained cautious, and the sustainability of the uptrend will depend on stronger downstream demand emerging in the coming weeks.
Ex-China HRC offers from major mills have edged up only slightly this week, rising by around $2.5/mt on average week on week to $480-490/mt FOB level, while traders’ offers have posted a sharper increase of about $10/mt over the same period, creating turbulence in the global market. In particular, the tradable price for ex-China HRC from traders has settled at $475-485/mt FOB, depending on the destination, versus $465-475/mt FOB last week. Ex-China Q235 HRC in Vietnam stands at $490-495/mt CFR compared to $485-486/mt CFR last week. Besides, offers for ex-China Q235 and Q195 HRC in Pakistan have settled at $495/mt CFR and $492/mt CFR, respectively. Besides, Chinese offers for Q195 HRC in Turkey have settled at $500-520/mt CFR, up by $10-17/mt week on week. Meanwhile, most offers for Q235 HRC in the Middle East have been voiced at $510-520/mt CFR UAE, up by $10-15/mt week on week, though, according to sources, a few offers from traders are voiced at $500/mt CFR UAE. In the domestic market, sentiment has been buoyed by firmer HRC futures prices and cost-side support from higher coke prices, prompting mills to cautiously lift their offers, although actual trading activity has remained restrained amid seasonal demand pressures.
Ex-India HRC prices have largely remained stable though with a slight upward bias both in offers in Europe and in the Middle East, with no significant trades confirmed during the week. More specifically, ex-India offers have been voiced at around $510-520/mt FOB, versus $480-500/mt FOB last week, for the Middle East, but have remained stable at $540-550/mt FOB for Europe. Notably, inquiries from Gulf Cooperation Council (GCC) countries have been increasing, but deals have not materialized so far as buyers are largely waiting for a clearer pricing trend to emerge. In the meantime, offers for ex-India HRC have settled at around $590-595/mt CFR Europe, up by $5/mt on the lower end of the range week on week. Notably, given stronger US dollar against euro, offers for European customers have increased in euro basis by around €10/mt. According to sources, with ex-China prices improving at a faster pace and European mills attempting to raise local prices, the combination of these factors is expected to bolster export activity, albeit with a lag that will likely coincide with the end of the holiday period in Europe.
In Vietnam, HRC import offers have risen further this week for mainly pipe-making grades, tracking gains in Chinese prices while SAE1006 re-rolling grade HRC offers have been held largely steady as most non-Chinese suppliers took a wait-and-see approach, lifting prices only marginally while some have kept them unchanged. More specifically, this week, ex-China 2,000 mm Q235 HRC offers, which are not targeted by antidumping (AD) duty, have been voiced at $490-495/mt CFR compared to $486-488/mt CFR last week. Meanwhile, offers for ex-China SAE1006 HRC have been estimated at $500-505/mt CFR, the same as last week. At the same time, despite the reduced competition from Chinese SAE1006 HRC suppliers due to the antidumping duty, other foreign suppliers have been slow to adjust their offers upward. According to sources, offers for ex-South Korea SAE1006 HRC have remained at $500-510/mt CFR this week, mainly for October shipment. Besides, offers for ex-Japan SAE1006 HRC have been voiced at $515/mt CFR for September shipment, up by $5/mt on the lower end of the range week on week. Furthermore, offers for ex-Indonesia SAE1006/SS400 HRC have been voiced at around $505/mt CFR for September and October shipment, the same as last week. As a result, the SteelOrbis reference price for imported SAE1006 HRC has remained stable at $500-505/mt CFR, while trade activity has still been slow due to the weak demand in the country.
Turkey’s HRC prices have increased in the domestic market and on exports, following the continuous uptrend in China. The demand, however, has not shown any dramatic improvement, although some restocking has been seen in the local market. Turkish mills are now targeting $550-565/mt ex-works and slightly above for September deliveries, $5/mt up over the week, while slightly discounts are still considered possible. In the export markets, while the European market has been relatively quiet, the offers increased by $10/mt from the upper end to $530-550/mt FOB, while some of the mills are voicing $560/mt FOB. In the EU, some deals have been reported to the northern region at $610/mt CFR duty paid. In the import HRC market of Turkey, China has been offering $500-510/mt CFR for September delivery of HRC with no takers seen around, up from $495-508/mt CFR seen earlier. Egypt has started the week at $550/mt CFR for September shipments with the deals for around 10,000 mt reported at $555/mt CFR by the end of the week. Russian sanctioned HRC is still on offer at $480/mt CFR Turkey, while, according to the buyers, the price idea for the non-sanctioned material is at $505-510/mt CFR minimum.
In the UAE, no fresh deals have been reported this week as the upward pricing trend initially driven by Chinese suppliers in recent weeks has continued. The increase has been supported by firmer futures prices and rising offers from other major exporters. As a result, Chinese suppliers are now quoting SS400 HRC at $510–520/mt CFR for late August and September shipments, up from last week’s $495–505/mt CFR. However, some non-VAT traders are reportedly offering at slightly lower levels, around $500/mt CFR. A similar price increase has been seen from Japanese suppliers, who recently sold some volumes to the UAE at $490–500/mt CFR. Their latest offers for October shipments have risen by $10/mt, now standing at $500–510/mt CFR. Indian suppliers have also followed the upward trend, although their price hikes have pushed offers beyond the interest level of Emirati buyers. This week, Indian mills are offering HRC at $510–520/mt FOB, compared to $480–500/mt FOB last week. This equates to approximately $540–555/mt CFR for September shipments to the GCC region.
The European HRC market has remained largely stagnant this week, with trading activity seasonally subdued. Local HRC prices have increased across European market and import quotations have now started to follow the upward trend. However, the market has remained characterized by a wide gap between offers and bids. Specifically, most local HRC prices from mills in northern Europe, for mainly October delivery, have been estimated at €580/mt ex-works, compared to €560-580/mt ex-works last week, while in Italy, indicative offers from mills have been estimated at €560-570/mt ex-works, for September and October deliveries, up by €20/mt over the past week. Meanwhile, tradable prices in the north have settled at €550-560/mt ex-works levels, up by €10/mt week on week and at €525-520/mt ex-works in Italy, the same as last week. According to sources, while mills have been pushing for further price hikes, support from end-user demand has remained limited, and inventories at many buyers’ facilities remain at relatively high levels. In the meantime, although most buyers’ price idea for import HRC has remained at €450-500/mt CFR, depending on the supplier, some foreign suppliers have increased their offers this week. In particular, offers for ex-Turkey HRC have increased to $610/mt CFR, including duty, which translates to around €530/mt CFR, with a few deals reportedly signed in northern Europe at above mentioned level this week. Besides, offers for ex-India HRC have been voiced at $590/mt CFR, which translates to around €517/mt CFR, compared to €493-497/mt CFR last week. $1 = €0.88