Most global hot rolled coil (HRC) suppliers have continued to push their offers higher this week, though the majority of outlets have been silent in terms of import purchases. While Chinese suppliers have remained bullish since the end of last week, other Asian suppliers like those from Japan, South Korea and Taiwan have been rather silent this week, preparing to announce new offers next week. However, suppliers from Turkey have followed the example of China, raising their HRC offers to local and foreign customers, supported also by higher import scrap prices in the latest transactions. European HRC mills have been bullish as well, claiming that they have no more HRC available for December delivery. However, suppliers from India were still not submitting new export offers, rendering official quotes at the same levels as last weeks.
This week, ex-China HRC offers price have edged up once again this week given the rising trends of local and futures prices amid improved sentiments due to the issuance of stimulus policies and the further rise in prices of raw materials, of iron ore in particular. Specifically, export offers for boron-added SS400 HRC given by major Chinese mills are at $550-575/mt FOB mainly for January shipment, with a midpoint at $562.5/mt FOB, up by $17.5/mt week on week. Meanwhile, the tradable level for SS400 HRC has been heard at $535-550/mt FOB, versus $525-545/mt FOB at the beginning of the week. At the same time, during the given week, import iron ore prices have moved up, providing solid support for domestic HRC prices in the spot market. At the same time, northern China has entered the winter heating season, resulting in firm demand for coke and coking coal, exerting a positive impact on their prices, which has also bolstered HRC prices from the cost side. Inventory of HRC has been at relatively low levels, positively affecting prices. Some HRC producers have implemented production restrictions, thereby reducing supply and exerting upward pressure on prices.
Another increase in HRC import prices has been seen in Vietnam this week, mainly given the upward trend in ex-China HRC offers supported by higher domestic prices and increasing HRC futures prices. At the same time, trade activity has been rather slow this week, and, according to sources, a few batches for small quantities for ex-China SAE1006 HRC are reported to have been bought in Vietnam at $570-572/mt CFR, while most ex-China offers have been voiced at $570-575/mt CFR for January shipment, up by $5-10/mt over the past week. Thus, the SteelOrbis reference price for imported SAE1006 HRC based on ex-China offers amid the absence of other suppliers in the market has moved to $570-575/mt CFR, up by $5-8/mt over the past week. Meanwhile, offers for ex-China Q195 HRC have been reported at around $545/mt CFR, up by $10-15/mt over the past week, with a few deals reported to have been signed at $540-545/mt CFR this week, while offers for SS400 HRC have settled at around $550-555/mt CFR, against $545/mt CFR at the beginning of the week.
In India, no large mill has any HRC export allocations until December and hence quotes are irrelevant. An export revival, if at all, can be expected only after new tariff quotas are made available in Europe, though it is uncertain if importers will look at India for sourcing as many supply options are available. Specifically, ex-India HRC trade activity has remained in limbo, with mills not submitting offers, rendering official quotes in the range of $590-620/mt FOB. At the same time, according to sources, several offers for ex-India HRC have been reported in southern Europe at €640/mt CFR, which corresponds to around $630/mt FOB, though no deals have been reported at this price level is considered to be too high for European buyers.
The uptrend of HRC prices in Europe has continued this week supported by the mostly reduced supply amid production cuts, the higher restocking reported in the region, and the minimal interest in import offers due to longer lead times, while new import prices have also increased this week. Specifically, while most ex-Asia HRC import offers have increased this week to €610-620/mt CFR, up by $10-20/mt week on week, mainly for January shipment, or delivery in February or March, local mills have decided to increase their offers for January delivery materials to €650-680/mt ex-works, up by €10-20/mt week on week. According to sources, trade activity has improved slightly this week, with a few orders signed at €640-650/mt ex-works in Germany, and at around €625-630/mt ex-works in Italy.
In Turkey, HRC producers have been trying to increase their prices, given the stronger import scrap price levels in the most recent deals. In addition, the HRC price situation in Europe seems to have become healthier, which also provides some support for Turkish mills. Another factor is that the HRC import segment is not crowded and China is still the primary source and is also targeting a price increase. The recently announced AD case is also having a toll on Turkish prices, since there is an expectation that imports from the targeted countries to Turkey may be limited significantly. This week, ex-China offers have increased from $577-580/mt CFR to $580-587/mt CFR for December shipments. Sources believe that, given the above factors, some buyers may choose to restock even at higher price levels. Turkey’s domestic HRC prices have settled at $650-670/mt ex-works in offers by the end of the week, up from the $620-630/mt ex-works levels available earlier. Still, discounts of around $10/mt are considered possible.
In the UAE, trading activities have remained quiet this week, possibly due to stock levels being sufficient for Emirati buyers and rising hot rolled coil offers, particularly from China, making Emirati buyers wary of concluding deals. According to reports, ex-China official offers for December shipment have increased by $5-10/mt this week, to $575-580/mt CFR UAE. However, a few Emirati re-rollers who are seeking cheaper prices have stated that certain Chinese offers are still at about $570/mt CFR to the UAE. In the current market condition, these levels appear low in relation to overall market offers. With ex-China offers rising and boosting other export offers, South Korean suppliers have decided to follow suit, with Indian suppliers seeing ongoing sluggish interest from the UAE and so they have discontinued offering HRC to the UAE.