The increased number of hot rolled coil (HRC) offers, mainly from Asia, has continued to trigger price drops in most regions globally. In particular, while more import deals for ex-Asia HRC, from China and Indonesia in particular, have been heard in Turkey at around $90/mt lower than local price indications, Asian suppliers have also been dropping their offers in Europe, exerting pressure on local quotes. In Vietnam, the size of discounts provided by Chinese traders has also resulted in significant drops in deal prices. As for India, most mills have been out of the market this week amid the national holiday, and even the rare offers for ex-India HRC heard late last week were uncompetitive in the global market.
In Turkey, domestic HRC prices have slid this week, mainly due to the aggressive offers in the import segment, which have dropped further. Mainly Asian suppliers are still in the market and the general level of offers is at $580-590/mt CFR and up to $600-610/mt CFR. Given the pessimistic market conditions and also the weakening market in the EU, nothing above $590/mt CFR has been considered workable. According to sources, around 20,000-25,000 mt were booked at this level from Indonesia, while the initial offer stood at $605/mt CFR last week. China is reported to have sold another 50,000 mt, but this time at $570/mt CFR, versus $580-590/mt CFR earlier. As a result, the weaker import prices have pulled down the domestic HRC prices in Turkey by around $10-20/mt to $660-680/mt ex-works and up to $700/mt ex-works in some cases. One Turkish producers has stopped its rolling line this week for a period of 10 days. In the export segment, Turkey’s HRC prices are at $650-680/mt FOB, down by $20/mt on average over the week. However, no export activity has been reported as the European market is weak and, moreover, is dominated by Asian sellers.
Business activity in the European HRC market has remained weak. The general range in the EU HRC market has remained mainly unchanged over the past week, standing at €650-700/mt ex-works. However, more specifically, the tradable level estimated by southern European mills, Italian mills in particular, is at €680-700/mt ex-works, down by €10/mt on the lower end of the range week on week, though most buyers are estimating the achievable level at around €650-670/mt ex-works. In northern Europe, most customers have reported the tradable level at €650-680/mt ex-works, the same as last week. However, according to a source, “Although some buyers still expect to book at €650/mt ex-works, some have reported official offers from northern European mills at €700/mt ex-works”. In the import segment, HRC prices in southern Europe have maintained their downtrend and sentiments have remained largely negative given no visible signs of a demand recovery. In particular, import HRC offers have been reported mainly at €620-660/mt CFR, compared to €650-690/mt CFR last week, with the lower end of the range corresponding to offers in the Italian market and with the higher end of the range in Spain. The most competitive offers in Italy have been coming from Japan and Taiwan and other suppliers are expected to follow their example.
In China, HRC export prices have moved down further amid the prevailing bearish sentiments and the big declines in local and futures HRC prices. In particular, export offers for boron-added SS400 HRC given by major Chinese mills are at $540-560/mt FOB mainly for December shipments, with a midpoint at $550/mt FOB, down by $7.5/mt week on week. However, according to market insiders, some small mills have been offering at around $520/mt FOB. Meanwhile, the tradable level for SS400 HRC has dropped to $505-530/mt FOB, down by $10-15/mt over the past week. Most offers for ex-China SS400 HRC have dropped to $520-530/mt CFR Vietnam, compared to $535-540/mt CFR offered last week. At the same time, Chinese suppliers have also continued to decrease their offers for higher-priced destinations, with several deals done at lower levels. In particular, market insiders have reported several deals for around 50,000/mt in total signed with Turkish buyers at $570/mt CFR, down by $10/mt from the offer price at the beginning of this week. Besides, ex-China HRC offers have been reported in the Middle East at $580-590/mt CFR, down by $20/mt over the past week and down $10/mt since the beginning of the week. Domestic HRC prices in China are at RMB 3,780-3,810/mt ($524-527/mt) ex-warehouse on October 27, with the average price level RMB 25/mt ($4/mt) lower as compared to October 21, according to SteelOrbis’ data.
In Vietnam, this week has brought another sharp decrease in HRC prices from Chinese traders, pushing offers for ex-China SS400 HRC to $520-525/mt CFR for December and January shipments, compared to $535-540/mt CFR offered last week. According to market insiders, several deals have been reported at $520-523/mt CFR Vietnam, though most bids from Vietnamese buyers have already been voiced at $510/mt CFR. Meanwhile, offers for ex-China SAE1006 HRC have been rare in Vietnam, with the indicative level standing at $550-560/mt CFR, down by $10-15/mt over the past week, though, according to market sources, some position offers have been heard at as low as $540/mt CFR. In the meantime, suppliers from Japan and Taiwan, who were offering at $570/mt CFR last week, have been staying out of the Vietnamese market, focusing on boosting sales to other markets such as Europe and the Middle East. The indicative offer prices for ex-Japan and ex-Taiwan HRC have been reported at $560/mt CFR Vietnam. As a result, the SteelOrbis’ reference price for import SAE1006 has moved to $550-560/mt CFR, down by $10/mt week on week, while lower offers are estimated by most customers to be bearish speculation, at least for now.
Indian steel mills have left the market this week due to the Diwali festival, which started on October 24, but even late last week most rare offers for ex-India HRC were uncompetitive in the global market, taking into account the rapid declines of ex-China, ex-South Korea and ex-Japan quotations. Though some expectations of a modest price increase in the local Indian market exist for November, the outlook for the export market is bearish. Sources said that ex-India HRC prices have been quoted in the range of $550-570/mt FOB, stable from last week, but bids received from Vietnam at $560/mt on CFR basis at the highest and at $590-600/mt CFR from Gulf buyers have been contributing to the ongoing poor market activity.