During the third week of July, business activity for hot rolled coil (HRC) has failed to recover in most regions globally considering the continuing weakness of demand in most outlets. At the same time, different price movements have been seen globally, since, while lower prices for HRC have been voiced in Europe, Turkey and the Middle East, the mood in Asia has been more positive, with Chinese traders giving higher offers in Vietnam and Pakistan, while new deals for ex-India HRC have been showing movements in opposite directions.
Most Chinese HRC mills have kept their export offers for HRC mainly stable even though HRC futures prices have continued to fluctuate. In particular, export offers for boron-added SS400 HRC given by major Chinese mills have settled at $555-565/mt FOB, the same as last week, with several offers still heard at $570/mt FOB. Meanwhile, the tradable level for ex-China SS400 HRC has been estimated at $540-550/mt FOB, depending on the destination. In particular, offers in Vietnam have been voiced at $548-550/mt CFR from traders offering without VAT, while other Chinese offers have been heard at $560-565/mt CFR. This means that prices have gained around $20/mt over the past week. Furthermore, ex-China SS400 and Q195 HRC have been offered to the Middle East and Turkey at $580-590/mt CFR, the same as last week. In the SAE1006 HRC segment, more business activity has been seen, with at least 20,000 mt of ex-China materials reported to have been sold in position at $565-575/mt CFR in Vietnam last week, while new offers have been reported at $590/mt CFR Vietnam this week. Another deal for 10,000 mt of ex-China SAE1006 HRC has been reported in Pakistan at $588/mt CFR, according to sources, while negotiations for another ex-China deal have been heard at $595/mt CFR. Domestic HRC prices in China are at RMB 3,900-4,040/mt ($543-563/mt) ex-warehouse on July 20, with the average price level RMB 30/mt ($4/mt) higher compared to that recorded on July 13, according to SteelOrbis’ data.
Ex-India HRC prices have continued to remain range-bound over the past week, standing at at $565-615/mt FOB, versus $575-610/mt FOB last week, though the mood has been varying according to different markets with some big volumes reported to have been sold at lower levels to Asia. More specifically, according to sources, following a long pause in sales to Vietnam, around 20,000-30,000 mt in total of ex-India HRC SAE1006 were sold in Vietnam at $580-585/mt CFR last week, which corresponds to around $560-565/mt FOB. At the same time, at least two deals aggregating 30,000 mt for delivery to Antwerp were heard in the range of $675-680/mt CFR, against similar deals reported at $670-675/mt CFR a week ago. Meanwhile, business activity has been showing no signs of any improvement in the Gulf region, with no fresh deals for ex-India HRC heard since last week.
This week started in Vietnam with sharp increases in import HRC prices in Vietnam. However, according to sources, customers managed to purchase several big batches for ex-China and ex-India HRC at lower levels last week. More specifically, market insiders have reported several deals for at least 20,000 mt in total of ex-China SAE1006 HRC at $565-570/mt CFR last week, while new offers have increased to $590/mt CFR this week. Besides, more deals for around 20,000-30,000 mt in total of ex-India HRC were signed at $580-585/mt CFR at the end of last week, while some traders in Vietnam even say the price was at $578/mt CFR in one of the ex-India contracts. However, this week, offers for ex-India HRC have been voiced at $590/mt CFR and above. The SteelOrbis reference prices for import SAE1006 HRC have settled at $575-585/mt CFR with the lower end of the range corresponding to buyers’ price idea for ex-China HRC even though higher offers have already been voiced by most suppliers.
Official HRC offers from European mills have remained unchanged over the past week, standing at €670-700/mt ex-works, with the lower end of the range corresponding to Italian mills’ offers and with the higher end from mills in northern Europe. However, workable prices have been reported at $635-650/mt ex-works in Italy, versus €650/mt ex-works last week. Meanwhile, while several large mills in the north have reported full order books for October, they have stopped offering, with tradable prices for HRC in northern Europe estimated at €660-670/mt ex-works, versus €680/mt ex-works last week. As for the import segment, although most foreign suppliers have been trying to sustain their offers at €610-620/mt CFR, lower offers at €590-600/mt CFR have been reported for ex-Asia HRC in Italy this week, while ex-Egypt HRC has still been offered directly from a mill at as high as €645/mt CFR Spain.
This week, the workable HRC prices in Turkish domestic market have declined, under pressure from low demand, weak coated and cold rolled prices, as well as some uncertainty in the import scrap market. The official offers have moved down to $650-660/mt ex-works base from $670-690/mt ex-works seen earlier. Moreover, according to sources, large buyers may succeed in achieving $630/mt ex-works base levels for decent order sizes. The material is for September delivery for the domestic market and for the same month of shipment for exports. The HRC offers from Turkey for foreign buyers have rolled back to $615-625/mt FOB, but a lot of market players believe $600-610/mt FOB levels should also be workable, taking into account the competition with Asia in the EU. In the import segment, not much activity has been seen this week in Turkey with the offers from China being indicative at $580-590/mt CFR and above levels, while $570-575/mt CFR could also be workable. However, given the dull market sentiments, Turkish buyers are aiming for $560-565/mt CFR at most.
In UAE, the lack of trade activity and weak end-user demand locally have persisted this week, despite the majority of HRC exporters having kept their offers the same as last week and having refused to provide reductions. Meanwhile, according to certain market players, some Chinese suppliers are attempting to give a slightly lower price at $580/mt CFR. Nonetheless, most mills are offering the same SS400 offers as previously at $590-600/mt CFR for September shipping. In contrast to Chinese suppliers who are attempting to offer slight reductions, South Korean suppliers have decided to begin offering to the UAE but with greater pricing demands. Their current offers are roughly at $650/mt CFR, but, given the poor outlook in the UAE, it is unlikely that they will obtain any bookings. Since the Emirati purchasers are still hesitating to restock simply due to the extremely low levels of business activity, Indian mills are still making no offers. In addition, according to sources, Saudi Arabian flat steel producer SABİC has offered HRC at $610/mt CPT.