The global hot-rolled coil (HRC) global market has seen different developments and price trends, depending on the region. While suppliers from the Black Sea region in the the CIS have been taking their time to announce offers for January, the Turkish market has continued its sharp downturn, amid the pressure on the currency and low domestic and international demand for Turkish HRC. In the meantime, in Asia some price increases have been seen in the Chinese domestic market, resulting in less aggressive export offers from the country. However, demand from the Asian importers, specifically Vietnam, has not increased much yet.
CIS-based HRC exporters are for now mostly reluctant to open their sales for January production. They prefer to watch the market, saying it is too early to offer and taking into account the decreasing trend in their key export destinations, specifically Turkey. For now, only Severstal has started offering for January, focused on European destinations where competition is nowadays limited and the mood is relatively positive. The company has announced $910-950/mt FOB for big coils and the export allocation is expected to be limited due to decent local demand and scheduled maintenance. Severstal expects to sell around 70,000-80,000 mt of HRC for January.
The supplier expects to receive support mainly from northern European demand, while in the southern part of the EU prices have stabilized for now at €860-870/mt ex-works for December production and at €900-930/mt ex-works for January production. Local market players have a lot of hopes for a more favorable situation in the first quarter next year due to the foreseen better demand from the automotive sector and the expected active HRC exports from Europe to the US.
Turkish mills have still been unable to sell HRC to the EU due to the quota issue and export prices have dropped by $20-30/mt over the past week to $850-875/mt FOB. Some sizable lots have been sold to Egypt at the higher end of the range, but demand in the other North African countries, which have been targeted by Turkey lately, has been described as insufficient. In the domestic market in Turkey, mills’ offers have declined by $25-35/mt to $870-890/mt ex-works, while some mills are still officially insisting on $900/mt ex-works levels. It is worth mentioning that the business situation in the country has been strongly impacted by the rapid depreciation of the local currency against the US dollar.
Recently, buyers from the UAE have also been active in their purchases and they have been seeking to bid low, taking into account competitive offers for Chinese origin HRC. However, they have after all booked close to 60,000 mt of HRC from India lately at $880-890/mt CFR levels as they failed to achieve levels $20-30/mt lower from suppliers.
In Asia, a certain increase in the local market in China has resulted in sellers pulling back their most aggressive export offers, specifically in the Vietnamese market. Over the past week, the local prices in China have increased by RMB 105/mt ($16/mt) to RMB 4,765/mt ($745/mt) ex-warehouse, while taking into account the RMB 50/mt ($8/mt) decline in the levels seen on Friday, November 26.
However, this development has not resulted in a significant business activity improvement in this destination. One 10,000 mt sale of ex-China SAE1006 HRC has been reported at $805/mt CFR Vietnam, while in the most recent offers by traders they are not willing to go below $815-820/mt CFR and the major mills are targeting $840/mt CFR levels. The SteelOrbis reference price for imported SAE1006 HRC in Vietnam has settled at $815-835/mt CFR, up by $10/mt on average from last week.