This week, the global hot-rolled coil (HRC) market has been relatively calm in terms of the business activity, taking into account that some of the large buyers have been absent due to the Muslim holidays. In the meantime, while China has shown some slight rebound due to stronger futures and Asian markets might be soon showing some slow recovery, the situation in the EU has remained negative and the prices continued sliding.
The mood in the Chinese HRC market has been cautiously bullish this week, with local and futures HRC prices showing some rebound. In several cities, the housing provident fund policy has been adjusted, with the loan amounts being raised, which will exert a positive impact on real estate purchases and on demand for steel. However, the gains have been limited this week and even though the outlook for next week is also optimistic, the pace of price increase will stay slow as high steel production and only gradual improvement in local demand will prevent strong rises. Export offers for boron-added SS400 HRC from most large Chinese mills have settled at $520-545/mt FOB, while offers from smaller mills at $510/mt FOB seen last week have been withdrawn this week. The tradable level for ex-China SS400 has been assessed at $515-530/mt FOB, up by $5/mt over the past week. And trading on the major sales destinations has been from moderate to low.
In Vietnam, the HRC market sentiment has somewhat improved from early this week, taking into account some rebound in China. Particularly, ex-China Q235/SS400 offers have been voiced this week at $525-530/mt CFR to Vietnam, up from $518-522/mt CFR seen early last week. Besides, Q195 and Q355 offers have increased by $5-10/mt to $520/mt and $540/mt CFR, respectively. Ex-China indications for SAE1006 HRC have increased once again by $5-10/mt to $560-565/mt CFR. The business activity has remained quite slow since many had restocked previously from the local market at $550/mt CFR and even slightly below. Others are waiting Formosa to announce its new offers, particularly for the skin-passed HRC. As a result, SteeOrbis reference price for import HRC in Vietnam has inched up by $5/mt to $560/mt CFR.
Ex-India HRC prices have mainly stabilized over the week, although some of the market players share some cautious optimism for the near future. However, the competition in the export market remains tough and the number of deals, even at slightly higher levels from the official offers has been too low in order o trigger a rebound. The general offer range for ex-India HRC has remained at $545-570/mt FOB with slightly higher levels fixed in small deals to Middle East. Particularly, Bahrain and the UAE have booked at $567/mt and $565/mt FOB, respectively. In the meantime, the bids from Asian markets have been reported at $520-530/mt FOB, unchanged over the week, mainly due to oversupply from China and generally poor sentiment.
The European HRC market has remained rather weak in terms of business activity, taking into account still insufficient demand and buyers’ pressure. Although the mills seem to be already squeezed in terms of their margins, the additional discounts were provided and the domestic prices have decreased by €10-30/mt over the week and have settled at €630-660/mt ex-works as per the estimated tradable levels. The offers are still higher - €640-650/mt ex-works in Italy, €10/mt down, and €650-660/mt ex-works up north, €20-30/mt down over the week. Many believe additional price decreased might be possible, although going below €630/mt ex-works is already stressful for most of the producers. In the import segment, the lowest offer levels have been still reported from Vietnam at €560-575/mt CFR, while other Asian mills, including India, South Korea and Japan have been standing at around €590-600/mt CFR levels, the lower end of the range is also offered by Egypt. Turkey’s latest offers before the holiday were reported at around €610-625/mt CFR including duty, marking the highest offer level in the import HRC market of the EU.
In UAE, the demand in the local market has remained weak, so even if import offers coming from ex-China have gotten softer, Emirati buyers have been postponing their purchases. As a result, while the majority of SS400 offers from Chinese suppliers fell by $10-15/mt this week to $540-555/mt CFR for May shipments, first-tier Chinese mills have been quoted in the UAE at about $570-580/mt CFR. Indian suppliers, on the other hand, have offered $600-610/mt CFR for May shipments, which is the same as last week. Additionally, South Korean suppliers have given a comparable price to last week at $640/mt CFR for the May shipment, whereas Japanese suppliers have not made any offers to the UAE this week.
