The hot rolled coil market globally has remained negative rather than positive this week, given the price decreases and pessimistic expectations seen in some markets. A few outlets have been silent due to the approaching end-of-Ramadan holiday. In particular, talks on HRC in Turkey have come to a standstill, but sentiment is downward amid aggressive offers from China and some lower indications from alternative Asian sellers and from Russia. However, while India largely remains uninterested in aggressive exports, China’s overseas prices, which have decreased this week, may have a slight chance of stabilizing due to its more positive local trend. In the EU, domestic HRC workable prices have softened this week, under pressure from active and numerous offerings in the import segment.
In the European Union, pressure from import HRC offers has intensified this week, making local mills soften their workable price levels a little. However, buyers’ bids have decreased further as the difference with the import offers from Asia particularly is at least €140/mt. This week, the tradable level for HRC in the EU has been reported at €840-850/mt ex-works, down by €5-10/mt. However, bids from some Italian customers are said to be as low as €800-820/mt ex-works. In the import segment, the general level of offers has fallen by €25/mt this week to €690-725/mt CFR and around 30,000 of ex-India HRC has recently been sold at the lower end of the range. In addition, several Indonesian lots are reported to have been booked at €720/mt CFR in Spain, down €15-20/mt over the past week. Ex-Japan and ex-South Korea HRC offers to Europe remain at high levels, though down by €20/mt to €720-725/mt CFR. Vietnam is at the midpoint of the general offer range, with prices at €700/mt CFR, down €25-30/mt over the past week.
Turkey’s flat steel market has been silent this week in terms of domestic market activity since buyers, who also have enough stocks for now, would like to evaluate the potential of the current market downturn. Scrap prices have weakened and export activity by Turkish HRC producers has remained low. In addition, import HRC suppliers are still aggressive and the gap with local HRC prices is quite large. As a result, many customers expect to see lower Turkish HRC offers shortly, but for now they have been maintained at $780-800/mt ex-works depending on the mill and the delivery term. As regards exports, the levels are lower at $750-780/mt FOB, but it seems these are not workable, at least in the EU. In the import HRC segment, Turkish buyers have been in new negotiations with China at $650-660/mt CFR for Q195 quality, following the earlier reported 30,000 mt sale at $647/mt CFR. Around 20,000-25,000 mt of HRC have also been booked by a re-roller from South Korea at $680/mt CFR, sources reported. In the meantime, some Russian sellers have been fishing around with $670-690/mt CFR, but a counterbid at $650-660/mt CFR has not been accepted by a Russian mill.
Ex-China HRC offer prices have moved down further despite some rebounds seen in local and futures HRC prices. Meanwhile, considering Chinese suppliers’ readiness to provide significant discounts, trade activity has improved slightly not only in the traditional markets like Vietnam, but also in higher-priced destinations. At present, export offers for boron-added SS400 HRC given by major Chinese mills are at $620-650/mt FOB, mainly for June shipment, with a midpoint at $635/mt FOB, down by $10/mt week on week. However, Chinese mills are unlikely to accept below $620/mt FOB in the next round if futures prices rebound further, sources believe. At the same time, the tradable level for ex-China SS400 stands at $580-610/mt FOB, versus $585-620/mt FOB last week. The lower end of the range corresponds to offers to Vietnam from Chinese traders, who are trying to sell short to this destination. Ex-China SS400 HRC to Pakistan have been voiced at $620-625/mt CFR, down by $5/mt week on week. Meanwhile, Chinese suppliers have also continued to decrease their offers for higher-priced destinations, with several deals done at lower levels. In particular, following offers for Q195 HRC at around $655/mt CFR Turkey, market insiders have reported several deals for at least 30,000 mt of ex-China Q195 HRC signed at $647/mt CFR at the end of last week.
Following a sharp price drop seen in Vietnam’s HRC import market last week amid price falls in China, this week has brought some stabilization in new ex-China offers to Vietnam. However, the general mood has remained negative in the country with traders continuing to agree to concessions, providing more discounts. Most Chinese suppliers have been offering their SAE1006 HRC at $645-650/mt CFR, the same as last week, with a deal for around 30,000 mt reported to have been signed at the $642/mt CFR level. Meanwhile, Chinese traders have been offering their SS400 HRC at $590/mt CFR, versus $590-600/mt CFR last week, while offers from Chinese second-tier mills have been heard at $610-620/mt CFR Vietnam. Some customers are still bidding at $580/mt CFR.
Ex-India HRC prices have continued to soften, but have still failed to attract any significant buying with distributors in Europe bearish over the medium-term trend and holding back from deals, while buyers from the MENA region are moving to cheaper alternative sources. The SteelOrbis reference price for ex-India SAE1006 2mm HRC was cut by $10/mt to the range of $670-740/mt FOB in the first half of the week. But by the end of the week, the higher end of the range has been reduced by $20/mt to $720/mt FOB, as some producers have started to provide lower offers to Europe, trying to accelerate sales. There has been information about one deal for 30,000 mt of ex-India SAE1006 HRC to Europe at $760/mt CFR, which translates to around $700-710/mt FOB. Also, one major mill has been heard offering at $770-780/mt CFR, down by at least $20-30/mt from the previous level.
In the UAE, due to the imminent Eid holiday, trading activity has been quiet, although China has continued to soften its HRC offers. According to sources, SS400 HRC offers have decreased from the previous week to $640-650/mt CFR for June shipment, down from $640-670/mt CFR. On the other hand, ex-India offers have remained on hold at $720-740/mt CFR for shipment in June. While larger mills attempt to sell at a higher range of $735-740/mt CFR, others sell at a lower-end range of $720–730/mt CFR. Similarly, South Korea has opted to offer the same price as last week for June and July shipments at $740/mt CFR.
