Indian mills have been active and aggressive in their HRC export sales for a few weeks now, putting pressure on domestic and import price levels in several regions of the world and dampening positive sentiment. However, this week, following a number of deals for February and early March shipment, Indian mills have revoked their low prices and have started to voice price increases. The absence of the low-priced import HRC has supported sentiment in the Turkish and European markets and has also given some confidence to the actions of CIS-based exporters.
According to estimations, over the past couple of weeks India sold at least 200,000 mt of HRC to various destinations such as Vietnam, the UAE, Turkey, the EU, Jordan and South Africa. Ex-India prices were the lowest ones offered to these markets and so deals were easily achieved, mainly at $715-720/mt FOB. Once considerable volumes were sold and the pressure from excessive stocks eased, Indian mills have started increasing their new offers by $15-25/mt and are expected to voice even higher levels for certain destinations.
India’s withdrawal of its aggressive offers has had a positive effect on the mood in Turkey’s HRC market, given that, while the overall competition in the import segment has not been tight, India has been trading at the lowest levels, pulling down the bids to other suppliers. The latest deals for HRC from India to Turkey were closed at $765-780/mt CFR for February-March production, but later on the Indian suppliers stopped offering these levels and some of them voiced $800-805/mt CFR offers. Moreover, they are expected to increase to $820-840/mt CFR. In the meantime, Turkish mills have sold good quantities for March production in their local market, having achieved $820-830/mt ex-works in deals. The official offers for their domestic market have increased further by $20-30/mt, mainly for April production. As regards exports, Turkish mills are still struggling to sell to the EU, although some price increase has been seen there as well. For now, HRC export levels from Turkey have settled at $825-840/mt FOB, with some deals closed to North Africa.
In the European market, Indian mills have been also selling HRC over the past few weeks, mainly at $870-880/mt CFR Antwerp and $840-850/mt CFR to southern Europe. In the European domestic market, sentiment has remained mixed as the price trend is just about to be shaped. In the northern region, local deal prices have increased by €10/mt to €810-830/mt ex-works, but deal prices have remained stable at €810-830/mt ex-works in Italy. Generally, an uptrend is expected in the EU HRC market as mills are aiming to raise prices due to higher production costs and due to some companies being sold out for the first quarter, specifically in northern Europe. Still, the limited demand from the automotive sector is a concern.
In the CIS, export availability remains tight for March production HRC, mainly due to some maintenance processes and decent domestic demand. In particular, MMK has officially given only 10,000 mt and 30,000 mt of HRC for export depending on the sales channel, specifically destined for the Turkish market. NLMK is going to have the usual volume of around 20,000 mt and is not in a rush to announce its price in an increasing market. Severstal is almost sold out for March to the EU with the latest deals closed at around $900-905/mt FOB Baltic region. As of now, only Ukraine’s Metinvest has some considerable volumes to sell for March production, but still its order book is more or less filled and the supplier is not under pressure to offer aggressive levels. In the Black Sea region, export prices from the CIS have increased by $10-30/mt over the past week.
The situation in the HRC market in Vietnam has also started to change, partly as Indian mills have increased offers by around $15-20/mt as compared to the latest deals and overall are not too interested in new negotiations, being more or less sold out. In addition, domestic HRC producers in Vietnam, who were previously forced to follow aggressive ex-India offers and to decrease their own prices, have managed to sell huge HRC volumes to their local market and to close their order books for March. Moreover, sizeable export sales have been done this week, to Southeast Asia and Europe, specifically. Aside from higher import offers from India, Vietnamese buyers have started to receive increased prices from alternative suppliers, specifically at $800/mt CFR from China and Japan.
In China, export prices for boron-added SS400 HRC have been adjusted downwards by $10/mt over the past week, with a midpoint at $770/mt FOB. The main reason is the sharp decrease in futures prices and limited domestic demand. Export demand has been poor, with the tradable level estimated at $760-765/mt FOB. Domestic HRC prices in China are at RMB 4,860/mt ($767/mt) ex-warehouse on January 21, up by RMB 15/mt ($6/mt) since late last week.