During the third week of December, the global hot rolled coil (HRC) market has continued to see mainly the same developments and prices trends in most regions, except in Europe where cautious optimism appeared following the increase of local HRC prices by ArcelorMittal by €30/mt and the review of the safeguard measures in the region. Meanwhile, other international markets including Asia and the Middle East have continued to be affected by Chinese prices, which this week showed a downward bias amid sharp drops in HRC futures prices. Thus, while most HRC buyers in Asia have been lowering their bids for ex-China materials, HRC prices have softened further in Turkey, while more buyers have preferred domestic sourcing versus risky imports.
While trade in the European HRC market has been gradually slowing down ahead of the holidays, the leading regional producer ArcelorMittal has decided to push its domestic prices across the EU up by around €30/mt to €630/mt ex-works. At the same time, some sources still do not exclude a further hike to be seen in late January mainly amid the review of safeguard measures, while other believe this will not be easy given no signs of a demand recovery for the next couple of months, referring to ArcelorMittal’s recent price hike as “a traditional move before the winter holidays to test the market”. Official offers from other European mills have been estimated at €600/mt ex-works in northern Europe, against €580-600/mt ex-works last week, and at €590-600/mt ex-works in Italy, up by €10/mt on the higher end of the range over the past week, though, according to sources, the tradable level is currently not above €580/mt ex-works in the north and at around €570-580/mt ex-works in Italy. Meanwhile in the import segment, most ex-Asia HRC prices have been voiced at around €560-580/mt CFR mainly for March shipment, mostly the same as last week. According to sources, import trade has been close to zero, with only occasional deals reported for around 10,000 mt of ex-Indonesia HRC in particular at around €560/mt CFR Spain this week. Besides, another deal for ex-Indonesia HRC is reported to have been signed in Portugal at around €560-565/mt CFR.
In China, although this week most HRC mills have continued to maintain their offers at unchanged levels, several producers as well as Chinese traders have decided to go a little lower as most customers have kept lowering their bids, coupled with the decreases in HRC futures prices which have been affecting the market mood. Specifically, export offers for boron-added SS400 HRC from large Chinese mills have settled at $485-495/mt FOB, with a midpoint at $490/mt FOB, down by $7.5/mt week on week and down by $5/mt since last Friday. Meanwhile, smaller mills have been offering their coils at $475-485/mt FOB, versus $480-485/mt FOB at the end of last week. The tradable levels for ex-China SS400/Q235 HRC have been estimated at $475-480/mt FOB, down by $5/mt over the past week. Offers for ex-China Q235 HRC in Vietnam have been estimated at around $490/mt CFR, though lower prices at $485/mt CFR have also been heard by the end of the week. Offers for Q195 HRC in Turkey have been voiced at around $503-510/mt CFR, down by $2-5/mt week on week.
In Vietnam, this week the mood has been more negative than positive as Vietnamese buyers are insisting on additional discounts, while Chinese HRC futures prices have indicated a further drop. Specifically, offers for ex-China Q235 HRC in Vietnam have been estimated at around $490/mt CFR, versus $500/mt CFR at the beginning of last week, though the tradable prices have been reported at $485-486/mt CFR for January shipment, down by $4-5/mt week on week. Meanwhile, offers for ex-China Q195 HRC have been voiced at $485/mt CFR, with a few deals already reported at $480/mt CFR. Offers for ex-China Q195 HRC have been reported at $480/mt CFR, down by $5/mt over the past week. As for SAE1006 HRC, the SteelOrbis reference price for imported SAE1006 HRC have moved to $500-510/mt CFR, down by $5/mt over the past week.
Ex-India HRC prices have been kept stable at $510-540/mt FOB, but bids have mostly been in the range of $480-500/mt FOB, and, even though the prolonged silent trade conditions were broken by some occasional deals to Europe and the Middle East, these failed to bring any optimism among large mills as buyers across most key destinations continued to shun imports from India. According to the sources, given the slight revival of demand in the Middle East, at the end of last week an Indian supplier sold 25,000 mt of HRC at $540/mt CFR UAE for January shipment, in line with ex-Japan HRC deals in the UAE. In the meantime, interest in Indian HRC has remained minimal in Europe due to duty-related risks, though, according to sources, an eastern India-based mill sold around 3,000 mt for delivery to Antwerp at $585/mt CFR. According to sources, most export orders for HRC have been voiced at $500-510/mt FOB levels, with mills seeking aggressively to book any available export order. “Any chance of price improvement in the market looks difficult as now we are getting into the year-end holiday lull,” an Indian trader said.
Domestic HRC prices in Turkey have slid by around $10/mt over the past week to $550-570/mt ex-works. The demand for medium and small tonnages has improved somewhat since for local buyers currently it is more beneficial to restock locally, whereas importing, especially from China, carries a lot of risks. Sources reported that one mill has been selling stock material at as low as $520-530/mt ex-works, aiming to minimize its stocks by the end of the year. Import offers in Turkey have decreased from $515-529/mt CFR to $502-515/mt CFR currently. No fresh deals have been reported this week, following two sales for large lots which were concluded and reported earlier. The interest in Chinese material is currently low, particularly due to the long lead time since the material is available for shipment in the second half of February. Aside from China, Russia remains active in the market. The sanctioned Russian material is now on offer in Turkey at $500/mt CFR, while the unsanctioned material is at $530-535/mt CFR, down $5-10/mt over the past fortnight.
In the UAE, following a period of increased import activity, stillness has prevailed this week, with HRC offers particularly from Japan and India remaining relatively unchanged. Meanwhile, offers from China have fluctuated over the last week as futures prices in China have softened slightly and trade activity remains slow. According to reports, Japanese suppliers' offers for the UAE for February shipment have stayed unchanged at $530-540/mt CFR, which is in line with the previous week's deals. Similarly, HRC offers from India have been quoted the same as last week's deals, at $540/mt CFR, with some of the larger mills still attempting to offer higher levels at $550/mt CFR. Chinese suppliers, on the other hand, have chosen to reduce offers after attempting to raise them during the previous week. Currently, SS400 offers to the UAE for end-of-January and February shipments are reported at $520-525/mt CFR, down from $530-550/mt CFR last week.