Hot rolled coil (HRC) trade has been rather slow in most regions globally, with most countries still seeing low demand. In Asia, following a slight recovery in ex-China HRC prices at the beginning of the week, by the end of the week most Chinese offers have rolled back to last week’s levels following yet another drop in futures prices and domestic offers. As a result, trade has remained muted in Asia as most importers are still counting on discounts. Meanwhile, suppliers from India have continued to keep their offers stable based on strong demand locally, while no actual demand has been seen in the main trade destinations including the Middle East and Europe. As for Europe, local mills have still failed to increase their offers since most buyers have continued to postpone new bookings.
While at the beginning of the week ex-China HRC suppliers were making small attempts to increase their offers given some improvement seen in the domestic and futures markets in China amid the stimulus policies issued for the real estate sector, by the end of the week export offers for boron-added SS400 HRC from large Chinese mills have rolled back to last weeks’ levels, to $560-580/mt FOB, down by $2.5/mt since the beginning of the week. At the same time, the tradable level for ex-China SS400 has remained at the same level as at the end of last week, and is up by $10/mt since Tuesday, August 29, standing at $540-550/mt FOB. According to Vietnamese buyers, ex-China SS400 HRC offers have been voiced at $550-555/mt CFR, the same as at the end of last week, while most bids have remained below the $550/mt CFR level. Customers in Pakistan have been receiving offers for ex-China SS400 HRC at $570/mt CFR, up by $5/mt week on week. Besides, following several deals at $575/mt CFR in the UAE last week, this week ex-China SS400 HRC offers to the UAE have been voiced at $570-580/mt CFR. Domestic HRC prices in China are at RMB 4,020-4,040/mt ($548-550/mt) ex-warehouse on September 8, with the average price level RMB 50/mt ($6.8/mt) lower compared to September 1, according to SteelOrbis’ data.
Import trade activity has remained slow in Vietnam this week, while import offers, especially those for ex-China HRC, have failed to recover in new deals so far, despite some sellers’ attempts to go higher at the beginning of the week. More specifically, at the start of the week, ex-China SS400 HRC offers were heard at $555/mt CFR, up by $5-10/mt week on week, though by the end of the week most offers have rolled back to $550/mt CFR. Meanwhile, the SteelOrbis reference price for import SAE1006 HRC has settled at $575-580/mt CFR, the same as at the end of last week, based mainly on ex-China offers, while other suppliers like those from Japan, Taiwan and South Korea, have been staying out of the Vietnamese market, with the indicative offers for their materials standing at $590-600/mt CFR, down by $10/mt week on week. At the same time, this week Vietnamese HRC producer Hoa Phat Group has announced its new local HRC prices for October and November shipments, cutting them by around $10/mt from the previous month to VND 14,160-14,190/mt ($589-590/mt) CIF.
Considering strong demand and realizations in the local Indian market, ex-India HRC prices have remained stable at $590-620/mt FOB, with sellers under no pressure to adjust them. At the same time, the competition with Chinese suppliers has remained tough, in the Middle Eastern and Asian markets in particular, while no significant recovery in demand in Europe has been seen so far despite the anticipated window for increases after the summer holidays in the region.
Business activity in the European HRC market has remained weak, with local mills failing to increase their offers since most buyers keep postponing new bookings due to still slow demand and uncertainty over the direction of prices. According to sources, although steel mills still aim to increase their offers to €680-700/mt ex-works, workable prices for HRC are evaluated at €630-660/mt ex-works, versus €630-665/mt ex-works last week, with the lower end of the range corresponding to tradable HRC prices in Italy at €630-650/mt ex-works, while the higher end corresponds to offers in the north, which have settled at €640-660/mt ex-works, down by €5-10/mt week on week. Meanwhile, most import offers for Asian origin mainly, including Japan, Taiwan, South Korea and India, have been reported at higher levels, standing at €630-650/mt CFR southern Europe, depending on the supplier, versus €620-630/mt CFR last week. However, several offers at lower levels have been heard in Italy at around €610-630/mt CFR for ex-Asia materials, and offers for ex-Ukraine HRC have been voiced at €600/mt CFR Italy this week.
Turkey’s domestic HRC offers have been kept high this week as there is still not much pressure from the supply side to spur sales immediately. Another supportive factor is the inactive import segment, where prices from China have continued to fluctuate but without resulting in deals. Other suppliers have also been mostly inactive in the Turkish market. By the end of the week, offer levels have settled at $670-690/mt ex-works, with $660/mt ex-works levels being possible in deals, according to some producers. However, some local buyers have reported $700/mt ex-works offers, but mainly for specific breakdowns and closer lead times. In the export segment, the latest deals to the non-EU markets have been closed at $610-630/mt FOB depending on the supplier, the total volume of sales is evaluated at around 75,000-80,000 mt (closed in the second half of August). Similar levels are valid for non-EU buyers still, while for European customers offers are mainly at $640/mt FOB. Import offers from China first increased by $20/mt this week to $590/mt CFR, but later on rolled back to $580/mt CFR. Moreover, some buyers report discounts may be applicable for 30,000-40,000 mt orders. However, no deals have been closed, according to the most recent market information.
In UAE, based on the minimal demand and the lack of acceptance of higher prices, Indian and South Korean HRC suppliers have chosen to remain mute in terms of offers. Furthermore, the ongoing success of their domestic markets has also had an impact on their choices. Meanwhile, Emirati customers who need to replenish stocks have continued to choose Chinese material, while currently ex-China SS400 HRC offers are at the same levels as last week, at $570-580/mt CFR. In addition, according to sources, two different Chinese suppliers have sold identical tonnages of 15,000 mt of HRC to the UAE: one for roughly $570-575/mt CFR and the other for $575-580/mt CFR, for October shipment.