In the last week of August, the global hot rolled coil (HRC) market has remained under pressure as muted demand and shifting trade dynamics have weighed on sentiments across regions. In Asia, Chinese suppliers have set the tone. Ex-China HRC prices have softened further, with probes into non-VAT cargoes adding to market unease and a slump in futures markets dampening confidence. Vietnam, however, has managed to secure discounted Indonesian HRC and has continued to attract ex-China cargoes at lower levels, pulling import prices to the country down slightly. Indian exporters have held their ground on offer levels, but the persistent gap between bids and offers meant deals have remained scarce. The Middle East has followed a similar trend of caution. Emirati buyers have delayed purchases, anticipating further declines in Chinese offers, while in Turkey HRC prices have showed little movement. Both domestic and import demand there have remained modest, leaving the market stagnant. In Europe, mills have continued to grapple with weak demand. Spot activity has stayed muted as buyers have held back, though producers are already looking ahead to September in hopes of a seasonal pickup.
Ex-China HRC prices have shown a slight downward bias over the past week, with both mills and traders lowering offer prices in response to weaker domestic HRC prices and declines in HRC futures prices. At the same time, market sentiment has been unsettled by investigations into non-VAT cargoes, adding uncertainty for exporters on pricing and trade flows, and prompting a more cautious near-term outlook. Specifically, export offers for boron-added SS400 HRC from large Chinese mills have moved to $475-485/mt FOB, with a midpoint at $480/mt FOB, down by $7.5/mt week on week, while offers from smaller mills have been voiced at around $470-480/mt FOB, down by $5-10/mt over the past week. Meanwhile, the tradable price for ex-China HRC from traders has settled at $470-480/mt FOB, depending on the destination, compared to $480-486/mt FOB last week. In particular, according to sources, while offers for ex-China Q235 HRC in Vietnam have remained relatively stable at $498-500/mt CFR, Chinese offers to other destinations like those in the Middle East have declined by around $5/mt to $510-515/mt CFR UAE, with a number of sources pushing for $500/mt CFR in their bids.
In India, HRC export prices have remained largely stable over the past week, standing in the range of $505-510/mt FOB in the Middle East, and higher in the range of $545-550/mt FOB in Europe. According to the sources, while some Indian mills have received inquiries from the Middle East, these have failed to be converted into deals owing to bid-offer disparities. It was learned that most of the bids received were below the $500/mt FOB mark in the range of $490-495/mt FOB, but sellers were unwilling to conclude deals below the $510/mt FOB mark. A western India-based large mill has reported a sale of 15,000 mt to an affiliated rolling mill in western Europe, but the price was not officially disclosed due to a “confidentiality clause for a transaction with a related party”, while market sources indicated that the price was around $530/mt FOB.
In Vietnam, following a deal for ex-Indonesia SAE1006 HRC signed at $497/mt CFR last week, this week trade activity in the SAE1006 HRC segment has remained slow, though offer prices have declined slightly from most foreign suppliers. At the same time, according to sources, Vietnamese customers have secured several deals for ex-China Q235 HRC, which is not targeted by antidumping (AD) duty so far. More specifically, a deal for around 25,000 mt of ex-China Q235 HRC, 2 mm, has been signed this week at $495/mt CFR for early November shipment. Besides, another deal for 10,000-15,000 mt of Q235 1.9 mm has been signed at $497/mt CFR for late October shipment. Meanwhile, offers for ex-Indonesia SAE1006 HRC have been voiced at $498-505/mt CFR, mainly for November shipment, against deal prices at $497/mt CFR last week, but compared to $510/mt CFR in offers reported at the beginning of this week. Besides, offers for ex-Japan SAE1006 HRC have been voiced $515/mt CFR for November shipment, the same as at the beginning of this week, while offers for ex-Malaysia SAE1006 HRC have settled at $505-510/mt CFR for November shipment as well, against offers at $520/mt CFR reported at the beginning of this week. As a result, the SteelOrbis reference price for import SAE1006 HRC has moved to $498-505/mt CFR, versus $497-510/mt CFR at the beginning of this week.
Turkish HRC prices have barely moved in the domestic market, remaining at $550-565/mt ex-works/CFR and slightly above in official offers. However, taking into an account sliding scrap prices and still insufficient demand for flats in Turkey, the bullish mood of HRC producers has been weakening. Hopes exist for a certain revival of demand in the EU, which is gradually returning from the holidays. The most recent ex-Turkey FOB HRC indications have been reported at $535-555/mt FOB officially for October shipments. Import offers from China have settled at $515/mt CFR by the end of the week, with a similar level fixed at the end of last week for around 25,000 mt of HRC in total, presumably to a pipe-maker. Re-rollers in Turkey, in the meantime, are hardly eager to pay anything above $500/mt CFR for Q195 3 mm and up material for October shipments. Import offers from Malaysia have been reported at $540/mt CFR, while Japan and Taiwan have been indicating around $525-530/mt CFR, both being unworkable currently for Turkish buyers. The Egyptian mill is focusing on alternative markets with the latest offers to Turkey voiced at $550-555/mt CFR. Russian mills are also out of the market, being sold out for October shipments, with the latest deals closed at around $510/mt CFR Turkey.
In the UAE this week, softer offers from China amid weaker HRC futures prices have prompted Emirati buyers, who had already secured some lots earlier, to show no urgency in imports and to scale back further activity. Reports indicate that SS400 offers from China are currently at $510–515/mt CFR, down slightly from $510–520/mt CFR last week, with some non-VAT suppliers attempting to test levels near $500/mt CFR. Meanwhile, Indian suppliers have maintained official offers at $530–540/mt CFR, though discounts have made workable levels closer to $530–535/mt CFR for October shipment. Japanese suppliers, in contrast, have kept their offers stable at $510–520/mt CFR for October shipment. Additionally, South Korean and Taiwanese suppliers have refrained from issuing new offers, with previous quotations standing at $530/mt CFR and $535/mt CFR, respectively.
The European HRC market has remained subdued this week amid the summer break, with only a modest pickup in activity seen in the north, while in the southern region, including Italy and Spain, most participants are expected to return in September. More specifically, local HRC prices from mills in northern Europe, mainly for October delivery, have been estimated at €580-590/mt ex-works, compared to €580/mt ex-works last week. Besides, according to sources, some mills are reported to be targeting €600-630/mt ex-works for new orders. However, the tradable price level has been estimated at €560-570/mt ex-works so far, up by €10/mt week on week. In Italy, however, while mills have been aiming to increase their prices for October delivery HRC to €570-580/mt ex-works, some sellers are still ready to sell at around €550-560/mt ex-works, while customers have continued to aim for €530/mt ex-works, the same as last week. In the meantime, trade activity in the import segment has remained close to zero, with offers estimated at €470-530/mt CFR, depending on the supplier, where the lower end of the range corresponds to indicative offers for ex-Indonesia HRC, while other foreign suppliers’ offer prices have mainly been estimated at €515-530/mt CFR levels.