Most hot rolled coil (HRC) producers, including those from Europe, Turkey, India and Asia, have been trying to keep their official offers at high levels. However, the increased number of offers, mainly from Asia, and some from Russia at more competitive levels, has triggered price drops in many regions. Thus, while several batches for ex-Japan and ex-Russia HRC are reported to have been sold to India, more import deals for ex-Asia HRC have also been heard in Turkey at a minimum of $50/mt lower than local price indications. In Vietnam, the size of discounts provided by Chinese traders has also resulted in numerous deals. As for Europe, trade activity has remained limited, though most market insiders agree that it is impossible for local mills to compete with foreign HRC suppliers.
This week, Turkish HRC producers have been able to keep their local prices relatively stable at $660-690/mt ex-works. However, whereas earlier discounts to $650/mt ex-works were considered possible, by the end of the week the mills refused to decrease prices even for large volumes, given increased import scrap deal price levels. Moreover, some producers have returned to $700/mt ex-works and above. For now, there is only cautious optimism since in reality HRC demand locally has been not sufficient and exports have remained very silent, particularly to the EU. While local mills are trying to resist pressure from buyers, some customers have decided to purchase imports. South Korea has traded a large cargo at $620-625/mt CFR, while India sold earlier a medium-sized lot at $615/mt CFR. China is in the market with $620/mt CFR for 50,000 mt of Q195 quality. Russia is not actively offering, but buyers generally believe that it is possible to buy from Russia below $600/mt CFR.
Indian HRC exporters have largely maintained prices unchanged after attempts to increase them last week despite a lack of any significant buying interest in the Asian and Gulf regions, with most sellers comfortable in focusing on better domestic demand. Only one Indian mill was trying to push some volumes in the export markets, but it was successful only after discounts. Ex-India HRC prices have slipped slightly to $565-600/mt FOB versus $580-590/mt FOB last week. The higher end of the range corresponds to the latest offer level from India to Europe, while the lower end has declined due to a sale to Vietnam. One large Indian mill, which remained in the export market, is reported to have sold 70,000 mt of HRC in total at $580-590/mt CFR, with the higher end of the range corresponding to SAE1006. The same mill was in negotiations to Europe at $670/mt CFR last week versus most offers from India at $700/mt CFR and above this week.
The depreciation of the domestic currency against the US dollar has put downward pressure on ex-China HRC export prices, which as a result has benefited trade to some destinations such as Vietnam. In particular, export offers for boron-added SS400 HRC given by major Chinese mills are at $570-590/mt FOB for November and December shipments, with a midpoint at $580/mt FOB, down by $15/mt week on week. At the same time, the tradable level for ex-China SS400 HRC has settled at $555-570/mt FOB, the same as last week. According to market insiders, numerous deals for around 100,000 mt in total have been signed with Vietnamese buyers at $565-580/mt CFRR (around $550-565/mt FOB) over the past two weeks. Furthermore, buyers in Pakistan have reported several deals signed with Chinese traders at $585-590/mt CFR. Meanwhile, domestic HRC prices in China, which have been increasing all week, by the end of the week, September 30, have dropped to RMB 3,920-4,000/mt ($556-569/mt) ex-warehouse, with the average price level RMB 20/mt ($2.8/mt) lower as compared to September 23, according to SteelOrbis’ data.
HRC imports have revived significantly in Vietnam, with numerous deals signed with different suppliers. In particular, Vietnamese buyers, which had been delaying purchases for a while, have reportedly booked around 100,000 mt of ex-China SS400 HRC over the past weeks at $565-575/mt CFR. Besides, a few deals for ex-China SAE1006 HRC have been signed at $590-595/mt CFR through traders. Apart from Chinese deals, market participants have reported a deal for around 10,000 mt of ex-Japan SAE1006 HRC signed at $605-610/mt CFR Vietnam at the end of last week. However, new offers for ex-Japan SAE1006 HRC have settled at $620/mt CFR this week. Furthermore, there was talk about another deal for 70,000 mt in an ex-India mixed cargo for SS400 and SAE1006 sold to Vietnam at $580-590/mt CFR last week, though this deal has not been confirmed. The SteelOrbis reference price for import SAE1006 HRC has moved to $590-610/mt CFR, from $600-610/mt CFR last week, amid the recent deals concluded in Vietnam.
Business activity in the European hot rolled coil (HRC) market has been weak lately, with local mills maintaining their official offers at unchanged levels, given high energy costs and cuts in production, at €780-820/mt ex-works in their official offers, mainly for November deliveries. However, levels of €750-770/mt ex-works are considered more realistic and achievable from both northern and southern European mills. As for the import segment, although the number of import offers has been increasing in southern Europe, buying activity has slowed down recently, with only occasional deals reported in the market. In particular, offers to southern Europe have been reported at €680-740/mt CFR, depending on the origin, up by €10/mt on the higher end of the range week on week. The lower end of the range corresponds to ex-Japan and ex-Vietnam HRC offers, while the higher end corresponds to offers from Egypt. Meanwhile, offers from other suppliers, such as South Korea, Taiwan, India and Turkey, have been ranging at €700-720/mt CFR.