During the first week of August, business activity has failed to recover in most regions globally considering the continuing weakness of demand in most outlets. At the same time, most countries have seen different price movements. In particular, in the EU activity in the spot market has been quite dull due to the vacation season, with local prices remaining mainly unchanged, while import prices have shown another drop. In Turkey, sentiment has been mixed as, while mills were forced to decrease export and local offers, some traders have started testing slightly higher prices for coils and sheets given the sanctions lately imposed on MMK Metalurji. Meanwhile, Indian HRC suppliers have slightly decreased their export offers considering the continued pressure from low demand in most key destinations. In Asia, on the contrary, certain price rises have been seen this week, mainly due to the firmer market in China, though actual business activity has remained slow.
In Turkey, sentiment in the HRC market has been mixed. Some players have started to see the trend as a cautiously upward one, mainly based on the MMK Metalurji issue. Due to the US sanctions, the producer may be out of the market as regards HRC supply, which may affect the general market balance. Still, at first this reason was not sufficient enough and prices have remained at $630-650/mt ex-works and $610-640/mt FOB. Export activity has been dull this week as the EU has left the market for seasonal reasons and bids to alternative markets have been low. There has been talk regarding deals to the UK and North Africa at $600-605/mt CFR. At the end of the week, when a $360/mt CFR scrap deal was disclosed to the market, the upward mood has strengthened somewhat in the HRC segment. However, while a price rise is also quite possible in mills’ official HRC offers, there are still doubts as to whether workable levels will improve much due to the negative situation in the coated and CRC markets.
Russian mills had already more or less sold out their August HRC volumes previously, and this week they have been either out of the market or selling in small parcels to top up cargoes. The lowest level was fixed in Turkey at $580/mt CFR. Instead, some fresh steel slab cargoes have been closed. One buyer in Turkey closed a deal for 20,000 mt at around $475/mt CFR, while previously two sales were seen at $450/mt CFR and around $460/mt CFR. The latest workable levels for slab in China have been set at $480-490/mt CFR and the same level was transacted in deals for Russian origin material around 10 days ago.
In Europe, trading activities have been very quiet in the past week, especially in the Italian market where most players will resume their activities only at the end of the month. Meanwhile, the range of domestic offer prices has remained mainly unchanged. In particular, achievable HRC spot prices are at €780-900/mt ex-works, with the lower levels recorded in Italy and the higher levels in northern Europe. More specifically, official offers in Italy were still heard in a range of €800-820/mt ex-works, though the estimated workable level for HRC has remained at €780-800 ex-works, the same as last week. At the same time, official offers have been rare in the northern European market as well due to the summer lull, and, while some offers from integrated mills have still been reported at as high as €900/mt ex-works, the tradable level has remained at €850-860/mt ex-works in the region. Meanwhile, business activity in the import segment has remained muted, though most offers have been reported at lower levels. In particular, offers to southern Europe have settled at €680-715/mt CFR, down by €15-20/mt over the past week, depending on the origin. The lower end of the range corresponds to ex-Asia and ex-India offers in the Italian market and with the higher end of the range corresponding to offers from Turkey.
Indian HRC suppliers are still facing bearish conditions in most key destinations as, even despite some rises from China which is the main competitor, demand in most outlets is still very weak. The ex-India HRC price range has settled at $565-590/mt FOB, where the lower end of the range is $5/mt above last week’s level. There have been some rumours about low-priced deals from India to the UAE (at $600/mt CFR or so), but they have been denied by most sources from both sides. The majority of offers have been reported to the UAE at $630-640/mt CFR, which translates to $570-590/mt FOB. However, no deals have been heard at this level. The lowest offer level for ex-India boron-added SAE1006 HRC has been heard in Vietnam, at $600/mt CFR, which translates to $565/mt FOB, though there has been a lack of offers from India at such a level.
At the same time, Indian steel mills have begun reducing base prices for flat steel products for August deliveries. For ArcelorMittal Nippon Steel and JSW Steel, the HRC price decline is INR 2,650-2,900/mt ($33-37/mt) from the previous month, while the CRC price decline amounts to INR 1,500-2,650/mt ($19-33/mt). Some other mills are heard to have reduced HRC base prices by up to INR 3,500/mt ($44/mt).
The Chinese HRC market has continued to show positive sentiments this week following the uptrend in China’s local and futures prices last week. Accordingly, ex-China export prices from both big and smaller mills have moved up this week. In particular, export offers for boron-added SS400 HRC given by major Chinese mills are at $610-630/mt FOB for September shipment, with the midpoint at $620/mt FOB, up by $20/mt week on week. At the same time, offers from smaller mills have settled at $595-600/mt FOB, up by $25/mt CFR on average over the past week. However, some trading companies have continued to try selling short at lower prices, due to the resistance to the uptrend from most foreign customers. Thus, the tradable level for SS400 HRC has been heard at $580-610/mt FOB, depending on the destination, compared to $560-600/mt FOB last week. Meanwhile, domestic HRC prices in China are at RMB 3,980-4,020/mt ($590-595/mt) ex-warehouse on August 5, with the average price level RMB 65/mt ($10/mt) higher as compared to July 29, according to SteelOrbis’ data.
In Vietnam, import HRC prices have continued to climb this week. Accordingly, Chinese suppliers have come up with new offers for SAE1006 HRC at around $640/mt CFR and above, compared to $610-620/mt CFR last week. Meanwhile, ex-China SS400 HRC offers have settled at $620-630/mt CFR Vietnam, up by $30/mt week on week. However, although some deals have been reported at higher levels, for ex-China SS400 coils in particular, most Vietnamese customers have continued to resist higher prices given the extremely low demand in the country. Meanwhile, indicative offers for ex-India boron added HRC through traders have been voiced at $600/mt CFR and above, compared to $590-600/mt CFR last week, while Japanese suppliers have reported their offers for SAE1006 HRC to Vietnam at around $640-650/mt CFR, up by $20-30/mt week on week. As a result, the SteelOrbis’ reference price for imported SAE1006 HRC has moved to $600-640/mt CFR, up by $10-30/mt week on week, with the lower end of the range corresponding to sporadic offers for ex-India boron-added coils, while the higher end of the range corresponds to offers from China and Japan.