The mood and price trends for hot rolled coil (HRC) in most regions globally have continued to demonstrate strong optimism this week. Besides, more interest in imported HRC has been seen in many regions, such as Turkey, Europe and the GCC region. In particular, in the case of Turkey, customers have been mainly seeking to purchase duty-free origins, namely, Egypt, while GCC-based buyers have continued to restock with Indian and Chinese HRC. In Europe, while local producers have kept testing the market with higher HRC prices, importers have been mainly focused on cheaper ex-Asia HRC.
In Turkey, the HRC trade has remained active as buyers have continued restocking, anticipating the increased demand from construction in the Iskenderun region. As a result, domestic mills have moved on to offering for June deliveries and have kept the prices for this material at $850/mt ex-works, while the products with shorter lead times, according to buyers, have been priced at a somewhat higher level - $860-880/mt ex-works depending on the tonnage. The domestic allocation remains limited due to the production suspension at Isdemir. The mill is expected to restart operations in March and until then the buyers will source HRC elsewhere. Particularly, around 30,000 mt of HRC have been booked from Egypt at $770-780/mt FOB, a part of the tonnage was for high grade material. Aside from Egypt’s HRC, which is a duty-free material in Turkey, negotiations are expected for Russian coils, which are available for April production and for a relatively close shipment date. The suppliers are targeting $750-800/mt CFR. Asian HRC is not yet in demand since it is to be delivered in the best case at the end of May. Chinese HRC prices remain the lowest at $700-720/mt CFR depending on the grade, while Taiwan is at $750/mt CFR. India, which is offering at $780-790/mt CFR, seems uninterested in sales to Turkey.
In Europe, while local producers have kept testing the market with higher HRC prices, expecting more restocking this month, the interest of European buyers in import HRC offers, in southern Europe in particular, has increased as well, as they appear to be sufficiently competitive currently. More specifically, official HRC prices from mills have increased to €800-830/mt ex-works, versus €800-820/mt ex-works last week. Producers from Italy have been offering their materials for May deliveries mainly at €800-820/mt ex-works, while some offers for June have already been heard at €830/mt ex-works and above levels. Besides, steel mills in northern Europe have been offering their May delivery HRC at around €800-820/mt ex-works, though offers for June have already been reported at €820-850/mt ex-works. Meanwhile, import offers have been reported at €740-770/mt CFR, versus €720-760/mt CFR last week. According to sources, following several big bookings for 100,000 mt in total of ex-Vietnam HRC at $720/mt FOB (around $785/mt CFR) during the past two weeks, this week, ex-Vietnam offers have increased to €750-765/mt CFR southern Europe. This week, a few batches for ex-Japan HRC are reported to have been sold to Spain at €760-765/mt CFR. Furthermore, according to sources, South Korean producer POSCO has also been active in negotiations this week, selling its materials at around €760/mt CFR Italy, while ex-South Korea offers to Spain have been voiced at €770/mt CFR and above. Apart from Asian suppliers, deals for around 30,000 mt in total of ex-Egypt HRC have been reported at $790-800/mt CFR or €740-750/mt CFR southern Europe this week. Furthermore, according to sources, a supplier from Saudi Arabia has sold some volumes of HRC to Spain at around €760/mt CFR this week.
In the UAE, there have been mixed feelings due to the uncertain HRC market outlook even though GCC purchasers continue to purchase some lots in order to refill stocks. As a result, Saudi Arabia and the UAE booked 30,000 mt of HRC from India last week at $720-725/mt CFR. While new offers remain unchanged from the previous week at around $720-730/mt CFR, according to Gulf market participants India now mostly prefers to supply Europe because of growing demand. In addition, another sale was reported this week, with China selling 10,000 mt of S275JR grade HRC to the GCC region for $690/mt CFR. Although lower prices have been heard from some Chinese suppliers at $670-680/mt CFR to UAE, the overall workable prices have stayed stable at around $690-700/mt CFR for April shipment. Nevertheless, because of stronger trading activity in the US market, South Korean offers to the UAE have remained absent.
Most Chinese HRC mills have decided to maintain HRC export offers at high levels, and some have even gone higher, despite price fluctuations in the local market. In particular, export offers for boron-added SS400 HRC given by major Chinese mills have settled at $665-575/mt FOB for mainly April shipment, with the midpoint at $670/mt FOB, up by $5/mt week on week. At the same time, the tradable level for ex-China materials has been maintained stable at a high level as well, though some offers at much lower than mills’ price levels have been heard in the market, for ex-Anfeng HRC or from traders dealing within the scope of a non-VAT trading policy. The tradable level for ex-China SS400 HRC has been assessed at $620-650/mt FOB, the same as last week. The lower end of the range corresponds to ex-Anfeng Steel SS400 HRC in Vietnam, voiced at $630-635/mt CFR, though other ex-China SS400 offers have been heard at $650/mt CFR and above levels, versus $640-650/mt CFR last week. Besides, according to sources, after several deals for small ex-China SS400 batches were reported to Bangladesh at $685/mt CFR, another deal for around 10,000 mt of ex-China materials has been signed at $695/mt CFR this week. Domestic HRC prices in China are at RMB 4,300-4,390/mt ($623-636/mt) ex-warehouse on March 3, with the average price level up by RMB 55/mt ($8/mt) compared to February 24, according to SteelOrbis’ data.
Ex-India HRC prices have consolidated at higher levels, but trade activity is down as most mills are fully booked for March shipment and a good part of April shipment allocations has also been sold out. Mills are mostly interested in bookings at higher levels only, while buyers in most major markets are reluctant to accept such levels. Ex-India SAE1006 2 mm HRC prices have consolidated to $700-750/mt FOB, with the midpoint at $725/mt FOB, up by $15/mt over the past week. But while in the previous weeks mills agreed to sell at slightly below the $700/mt FOB mark, at the moment most sub-$700/mt FOB offers have been completely pulled back by sellers. Last week, 30,000 mt of HRC in total were sold by one Indian mill at $720-725/mt CFR to the Middle East, which translates to $690/mt FOB or slightly above. However, at the moment mills are not interested in selling even at $730/mt CFR to the UAE.
India’s large integrated steel mills have increased domestic flat product base prices by INR 1,500-2,000/mt ($18-24/mt) for March with immediate effect. Initially, it was expected that the local base price increase would be around INR 1,000/mt for March, making the recent movements slightly above expectations. It may be pointed out that this is the second revision in base prices in less than a week, with mills effecting an ‘interim’ price hike of INR 500/mt ($6/mt) last week.
In Vietnam, bullishness has been mounting in the HRC import market this week. In particular, after at least 20,000 mt of ex-China SAE1006 HRC were sold to Vietnam at $670-675/mt CFR last week, new offers have been heard at $685-690/mt CFR, with a few small deals reported to have been signed at $680/mt CFR this week, according to sources. At the same time, most offers for ex-China SS400 HRC have been voiced at $650-660/mt CFR, up by $10-20/mt week on week. However, according to sources, the materials have still been available at $635/mt CFR from some Chinese suppliers. At the same time, offers for SAE1006 HRC from Japanese, Indian and Taiwanese suppliers have been reported at $720-740/mt CFR, up by $10/mt on the higher end of the range over the past week. Thus, given the ongoing bullishness among all foreign suppliers and the hikes reported in deal prices for ex-China materials, the SteelOrbis reference price for import SAE1006 HRC has moved to $680-690/mt CFR, compared to $670-680/mt CFR at the end of last week.
At the same time, this week, the second largest HRC producer in Vietnam, Hoa Phat Group, announced its new local prices for HRC for deliveries in April and May, hiking them by around $35-40/mt month on month to VND 16,330/mt (around $690/mt) CIF. Prices for HRC from Hoa Phat are slightly lower than Formosa’s $695-700/mt CFR for April shipment, though, according to sources, Formosa is likely to revise its offers upwards for May deliveries HRC in the coming weeks.