After some favourable expectations had persisted in the global hot rolled coil (HRC) market last week mainly amid higher offers from Chinese suppliers, this week most global HRC suppliers, including those from China, India, Turkey and Europe, have decided to keep their prices stable seeking clarity on the future price trend. At the same time, it is notable that most Asian suppliers have remained positive in terms of the future trend, resulting in the termination of price reductions and even in higher offers for HRC in Europe by the end of this week.
In Europe, most offers from HRC mills have remined relatively stable this week. At the same time, although import prices have finally stopped falling sharply, with some offers heard at even higher levels, the general market mood is still far from optimistic given the lack of business activity and persisting bids voiced at lower levels domestically. HRC offers prices in the EU have settled at €650-710/mt ex-works, versus €650-720/mt ex-works last week, with the lower end of the range corresponding to the tradable level for HRC in Italy, the same as last week. However, talk about lower offers from one of the Italian mills at €630-640/mt ex-works has been circulating in the market. At the same time, HRC offers in northern Europe have been reported at €700-710/mt ex-works, down by €10-20/mt week on week, while the tradable level has remained at €700/mt ex-works. Meanwhile, import HRC offers to southern Europe have been heard at €580-620/mt CFR, with the higher end of the range corresponding to a deal for 12,000 mt of ex-India HRC signed this week. The lower end of the range corresponds to ex-Vietnam offers at €580-590/mt CFR Italy and Spain, while offers for ex-Japan and ex-South Korea HRC have been voiced at €610-620/mt CFR Spain. Besides, apart from Asian suppliers, market insiders have reported ex-Saudi Arabia HRC offers at €615/mt CFR Spain.
In China, most big mills have rolled over their export prices, with only small corrections reported. In particular, export offers for boron-added SS400 HRC given by major Chinese mills have settled at $555-570/mt FOB, with a midpoint at $562.5/mt FOB, which means the price has lost $12.5/mt week on week. However, in fact, workable prices have remained unchanged, as no offers at $590/mt FOB have been accepted by any customer. Meanwhile, the tradable level for Chinese SS400 HRC has remained unchanged over the past week, standing at $540-550/mt FOB, though several traders have reported their offers in Vietnam at $545/mt CFR, which means around $535/mt FOB. Most offers for ex-China HRC in Turkey have been reported at $590-595/mt CFR for July and August shipments, the same as last week, with a deal for 5,000 mt reported to have been signed at $595/mt CFR, according to sources. Domestic HRC prices in China are at RMB 3,820-4,020/mt ($537-565/mt) ex-warehouse on June 15, with the average price level RMB 30/mt ($4.2/mt) higher compared to that recorded on June 8, according to SteelOrbis’ data.
The ex-India SAE1006 HRC price has been maintained at $580-600/mt FOB, but both buyers and sellers have refrained from concluding bookings as the current market trend is “conflicting and unpredictable”. Among the unpredictable cues has been the hardening of ex-China prices, which a section of the market attributed to speculation. Indicative offers for ex-India HRC in the Middle East, in the UAE in particular, have been reported at $615-630/mt CFR, depending on the supplier, which corresponds to around $580-595/mt FOB. Meanwhile, at the beginning of the week, ex-India HRC offers in Italy have been heard at around $645/mt CFR, or around $595/mt FOB, while by the end of the week a deal for around 12,000 mt of ex-India HRC has been reported in Spain at $670/mt CFR. Besides, HRC customers in Turkey have reported an offer from one of the Indian mills at $630/mt CFR, the same as last week, which remains unworkable given cheaper offers from other suppliers, including China, Japan and South Korea.
In Vietnam, import trade activity has remained rather slow this week, with most offers for ex-China SAE1006 HRC standing at $565-575/mt CFR, the same as last week, while most offers for ex-China SS400 HRC have been voiced at $545-550/mt CFR, the same as at the end of last week. At the same time, offers from other suppliers have remained rare in Vietnam, though market insiders have been estimating indicative offers for ex-Japan and ex-Taiwan SAE1006 HRC at around $570-580/mt CFR. Meanwhile, this week, Vietnamese steel producer Formosa Ha Tinh Steel has announced new local HRC prices for August shipment, increasing them slightly for small-batch orders, but sustaining them at mainly the same levels as in late May for big tonnages. In particular, offers for re-rolling non-skin passed SAE1006 and SS400 HRC to local customers have been voiced at $580-600/mt CFR, depending on the size of orders, compared to $580-583/mt CFR reported in late May and versus $620-623/mt CFR reported in mid-May. Given the absence of trade during this week, SteelOrbis’ reference prices for import SAE1006 HRC have remained at $570/mt CFR level as on Friday, June 16.
In Turkey, HRC prices have stabilized this week with minimum market activity seen. Some buyers restocked earlier, while some prefer not to carry excessive stocks as they expect a price downturn in the coming weeks. The currency fluctuations and the expectations for the Central bank of Turkey to announce new interest rates are additional reasons for the slowness of trade. In the meantime, mills are trying to keep their prices high, claiming they are sold out and that availability is limited. However, according to sources, supply is not excessive at present due to some furnace issues at one of the mills, that resulted in pending orders for August. Still, domestic HRC prices are at $670-700/mt ex-works, including realistic levels and the producers’ targets. Buyers, however, consider the higher end of the range overpriced. In the import segment, China’s offers are mainly at $585-595/mt CFR, relatively stable over the past week. No deals have been reported for ex-China material, while India is offering at $630/mt CFR for August shipments. In addition, suppliers from South Korea and Japan are offering at around $615-620/mt CFR, with interest from Turkey yet to be seen.
In the UAE, most Emirati customers have been hesitating to make purchases because of the unclear HRC market future and domestically weak end-user demand. Nonetheless, a HRC deal was heard from Japan to the GCC for July-August shipment at $580/mt CFR, although the purchase has not been confirmed as of the time of publication. Meanwhile, fresh offers from China for July shipments to the UAE have remained stable at around $590-600/mt CFR since last week. While waiting for the market to settle, the majority of Indian mills have made the decision not to make any offers this week. However, claims have circulated in the market that some Indian suppliers are offering at approximately $615-630/mt CFR. Additionally, South Korea's offers to the UAE for shipments in July and August remain unchanged at $555-600/mt CFR.