Chinese suppliers have kept dropping their hot rolled coil (HRC) offers, putting the global HRC market and especially Asia under continuous negative pressure with local HRC prices dropping in Vietnam. At the same time, while most suppliers have been failing to secure deals, Japanese HRC sellers have managed to sell sizable volumes in the Middle East and have been in active negotiations with other customers in Asia, including those in Bangladesh and Pakistan. In Europe, however, import trade activity has been close to zero due to safeguard quota issue while local HRC prices have moved sideways on limited restocking. In Turkey, HRC prices remained unmoved with only some discounts provided locally, while import offers, ex-China HRC in particular, have continued sinking.
Chinese HRC suppliers including big and smaller mills, as well as a number of traders, have kept correcting their offers slightly down for overseas buyers, given the lack of significant support from the domestic market and the continuous declines in HRC futures prices. Export offers for boron-added SS400 HRC from large Chinese mills have settled at $530-540/mt FOB, with a midpoint at $525/mt FOB, down by $5/mt week on week. At the same time, offers from smaller mills have been mainly heard at $520-525/mt FOB. Meanwhile, tradable SS400 HRC prices have settled at $515-525/mt FOB, against $515-530/mt FOB last week. Offers in Vietnam and Pakistan have been voiced at $530-535/mt CFR, and at $545-550/mt CFR, respectively, mainly the same as last week, though ex-China offers in the Middle East have decreased slightly by $5-10/mt to $565-570/mt CFR UAE and to $565-570/mt CFR Turkey.
Ex-India HRC offers have remained relatively stable this week in the main trade destinations, though showed some increase Europe despite slow trade. Specifically, ex-India HRC prices have settled at $560-610/mt FOB compared to $560-600/mt FOB a week ago, while a greater number of mills are heard to be submitting offers to the EU. The lower end of the range still corresponds to indicative offers in Asia and the Middle East at $560-580/mt FOB, Indian HRC offers to Europe have increased to $660-665/mt CFR southern Europe and to $670/mt CFR Antwerp, up by $10-20/mt over past weeks, which translates to around $610/mt FOB. According to market insiders, a deal for 8,000 mt for delivery to Antwerp has been heard at $670/mt CFR while another Indian supplier has concluded a trade for 12,000 mt for delivery to Portugal at $655/mt CFR.
This week, Vietnamese steel producer Formosa Ha Tinh Steel (FHS) announced that its local prices for HRC, mainly for August shipment, will be $30/mt lower compared to prices initially announced last month and down by $15/mt since the last revision in late May, reaching $565-575/mt CIF Vietnam ports for non-skin passed SAE1006 and SS400 HRC and $570-580/mt CIF for skin-passed SAE1006 HRC, respectively. This decision was mainly explained by the more pressure from import prices, for ex-China HRC in particular. In the import HRC market in Vietnam, several deals for ex-China SS400/Q235 HRC have been reported at $528-530/mt CFR, while most offers have remained at $530-535/mt CFR, the same as last week. Most bids, however, have been voiced at $525/mt CFR level. Meanwhile, most offers for ex-China SAE1006 HRC are still voiced at $555-560/mt CFR, though the reference prices have moved down to $550-555/mt CFR, against $555/mt CFR last week.
In the UAE, despite the market being quiet before the Eid holiday this week, trade picked back up, as Emirati and Saudi buyers bought some HRC from Japanese suppliers. As a result, Emirati and Saudi purchasers have bought 25,000 mt and 10,000 mt HRC from Japan for August shipment at $570-575/mt CFR. Meanwhile, although Chinese suppliers have continued to lower their SS400 offers from last week by $10/mt to $560-570/mt CFR for the August shipment, no deals have been reached with GCC, but are likely in the next weeks. India, on the other hand, has persisted in making comparable offers at $600-620/mt CFR before. However, market participants claim that these offers are rarely heard since the Indian local market is better than the UAE market.
Turkish HRC producers have been trying to avoid discounts on which the buyers are insisting, citing the higher scrap and already August availability. As a result, in the domestic market the earlier available $585/mt ex-works offers are now off the table and the official levels are at $595-610/mt ex-works for August delivery. On exports, most of the mills are at $600-610/mt FOB, trying to take advantage of the recent safeguard adjustment in the EU. However, no large deals have been reported this week. In the import segment, Chinese HRC is at $565-570/mt CFR with $560/mt CFR considered possible. However, Turkish buyers are not in the position to restock in large volumes, taking into account low pricing for coated steel, slack demand ahead of the holiday and uncertain HRC market prospects. Along with China, Turkey has been receiving offers from Japan at $610-615/mt CFR, which is not workable, while ex-Egypt HRC is assessed at $625-630/mt CFR.
In Europe, local HRC mills have failed to increase their prices in new deals, with most offers remaining at the same level as last week. Specifically, official offers from European mills have remained at €640-650/mt ex-works in Italy and at €640-660/mt ex-works in northern Europe, unchanged from the last week. However, the tradable prices both in Italy and in the north have remained at €630-640/mt ex-works. Import market has been quiet as well, with market insiders still waiting for the European Commission to officially confirm new safeguards, while most foreign suppliers have decided to go higher in their new offers this week. Import HRC prices have settled at €615-635/mt CFR, depending on supplier, up by €10-15/mt on the slower end of range week on week. Offers for ex-South Korea HRC have been voiced at $675 – 680/mt CFR, which translates to around €625-630/mt CFR, with a deal for around 5,000 mt reportedly signed at €625/mt CFR Spain, including 90-day deferred payment through a trader. offers for ex-Turkey HRC have been estimated at around $660 – 680/mt CFR, or €615-630 /mt CFR, including duty, versus €610-620/mt CFR last week. Besides, offers for ex-Saudi Arabia have been heard in southern Europe at €630-635/mt CFR, the same as last week.
