Some unexpected rebound movement has been reported in HRC futures prices in China this week, providing some hope for an improvement in Chinese HRC export prices. However, most Chinese HRC exporters have remained rather pessimistic so far, with big mills and some traders decreasing their prices over the past week, which resulted in several discounted sales to different destinations, such as Vietnam and Turkey. Other Asian suppliers have been cautious in terms of sales, while Indian HRC mills have still been keeping away from exports, remaining focused on local sales. In Europe, although most market insiders share the opinion that the market has reached the bottom and will not go down further in the short term, local prices both in northern and southern Europe have remained unchanged over the past week and they are also unlikely to see a significant rebound for the moment.
In China, export offers for boron-added SS400 HRC from the major mills are estimated at $535-550/mt FOB, for December shipment, with a midpoint at $542.5/mt FOB, down by $12.5/mt since the beginning of last week, and rolling back to the price levels two weeks ago. Meanwhile, smaller Chinese mills have been offering SS400 HRC at around $525/mt FOB, and have remained more attractive for traders who are trying to fulfil their orders. The tradable levels for ex-China SS400 HRC have been estimated at $510-525/mt FOB, down by $5/mt on the lower end of the range since the end of last week and down by $10/mt on average over the past week. According to sources, several deals for around 10,000 mt of ex-China Q195 HRC have been reported in Vietnam. Furthermore, at least two big lots are reported to have been sold in Turkey, according to sources, while deal price levels have been standing at around $520/mt FOB, though deals at below $520/mt FOB are highly possible too.
The general mood has remained negative in Vietnam’s HRC market, since, although ex-China HRC futures prices have been showing some improvement and some Chinese HRC exporters are reported to have raised their HRC offers for Vietnamese buyers, no buyer has been ready to accept any hike so far. In particular, following ex-China offers for Q195 and SS400 HRC at $515/mt CFR on Monday, by the middle of the week most offers for December shipment materials were voiced at $527-530/mt CFR, against $520-525/mt CFR one day previously. At the same time, while some occasional deals for around 5,000-10,000 mt in total have been reported this week by Vietnamese pipe makers for Q195 and SS400 materials at $520/mt CFR, import trade has been close to zero in the SAE1006 HRC segment, with the reference price remaining at $550-560/mt CFR, the same as last week. At the same time, by Wednesday, October 25, local producer Formosa Ha Tinh Steel (FHS) had decided to revise its offers, decreasing them by around $20/mt to $555-560/mt CIF for re-rolling skin-passed and non-skin passed SAE1006 and SS400 HRC for December-January shipment.
Indian mills have continued to stay away from submitting HRC offers overseas, with prices notionally remaining unchanged at $590-620/mt FOB, since in major Asian destinations such as Vietnam cheaper alternatives for ex-China have kept invading the market, while in the other outlets like the Middle East no Indian mill has reported any trade over the past week due to geo-political uncertainties in the region and tough competition with other Asian suppliers.
At the same time, market insiders have reported higher volumes of imports of HRC in India, particularly from China, which, according to sources, limit the upside potential of local prices. Specifically, following numerous deals signed for at least 80,000 mt of ex-China HRC at $582-585/mt CFR in previous weeks, this week a new deal for around 10,000 mt has been reported at $580/mt CFR. At the same time, more deals for ex-China HRC have been voiced at much lower levels, at $555/mt CFR in particular, given that they have been signed with a Chinese mill without BIS certification.
In Turkey, some re-rollers and pipe-makers have revealed interest in ex-China HRC amid their need to restock and believing there will be no dramatic price decrease for this origin in the near term. The costs of production remain quite high and prevent large discounts. Moreover, in the case of successful finished steel exports, Turkish HRC importers will not need to pay the import tax of 13 percent for Chinese feedstock. As a result, at least three deals have lately been closed from China for around 20,000-25,000 mt each. The re-rollers paid around $555-560/mt CFR for Q195 material, while the pipe-maker, according to sources, has accepted over $610/mt CFR, but for a product breakdown including a wide range of thin gauge material. The latest offers are at $570-575/mt CFR for December shipments. In the domestic market, Turkish offers have been at $630/mt ex-works and higher, although the general view is that sentiment has weakened. Some mills, according to sources, may accept around $620-625/mt ex-works for serious orders.
In the UAE, following the strong trade activity observed last week, Emirati buyers have stayed quiet this week, as have import offers, mainly from South Korea and Japan. Meanwhile, Chinese suppliers have decided to offer minor price cuts, although prices may change in the coming week as Chinese traders’ prices rebound. As a result, ex-China offers for December shipping have dropped by $5-10/mt this week, to $560-575/mt CFR. South Korean and Japanese suppliers, on the other hand, have decided to leave their offers unchanged from last week, at $590-600/mt CFR and $580-585/mt CFR for November and December shipments, respectively.
Affected by still slow demand, the European HRC market has remained pessimistic, with domestic offers standing at $600-640/mt ex-works, mainly for delivery in December, the same as last week. According to sources, trade activity has been slightly better in Italy this week, but based on the necessity to restock rather than on a demand improvement. Meanwhile, although mills in northern Europe have kept pushing for $640/mt ex-works and even slightly higher levels, workable prices have remained at €600-620/mt ex-works. In the import segment, no bookings from countries with quotas have been heard this week, while import HRC prices have been voiced at €600-630/mt CFR southern Europe, against €580-615/mt CFR last week. The lower end of the range corresponds to offers for ex-Vietnam HRC, up by €20/mt, while the higher end corresponds to ex-Egypt HRC, up by €15-20/mt, week on week. Suppliers from Japan and Taiwan have been offering at €610-615/mt CFR, up by €10/mt week on week. Offers from one of the biggest South Korean HRC mills have been voiced in Spain at €610-620/mt CFR.