Although sentiment has improved in the past weeks in the global hot rolled coil (HRC) market, with some Asian and European producers testing the market with higher prices, most of them have been failing to attract buyers so far. Thus, the gap between official HRC offers from mills and real tradable prices have been at around €20-30/mt in Europe, while suppliers from India who have officially increased their offers have kept providing discounts in new deals to boost sales. Meanwhile, Turkish HRC mills have been forced to make terms with local buyers, decreasing their domestic prices given still though competition with import materials and slow demand. However, by the end of the week, yet another hope for prices recovery has appeared in China amid futures HRC prices increase.
Ex-China HRC prices have moved sideways compared to the previous week, standing at $555-565/mt FOB for mainly September shipment from major Chinese mills, with several offers from big mills, like Benxi Steel still heard at $575/mt FOB and considered by buyers as unacceptably high. At the same time, the tradable level for ex-China SS400 HRC has been estimated at $525-540/mt FOB, down by 5-10/mt week on week, with the lower end of the range corresponding to ex-China offers in Vietnam. In particular, most offers for ex-China SSS400 and Q195 HRC have been heard at $535-540/mt CFR, versus $545-550/mt CFR at the beginning of last week. Furthermore, most ex-China SS400 and Q195 HRC have been offered in Turkey at $580-590/mt CFR, down by $10/mt over the past week, while some have been voiced by traders at as low as $570/mt CFR UAE, sources said. Meanwhile local demand for HRC in China has been sluggish in the traditional offseason of hot weather, while HRC producers’ supply indicated a limited amount of contraction. However, by the end of the week, futures prices in China have increased slightly amid the introduction of stimulus measures by the government. Thus, domestic HRC prices in China are at RMB 3,860-4,020/mt ($540-562mt) ex-warehouse on July 13, with the average price level RMB 25/mt ($3.5/mt) lower compared to that recorded on July 6, but RMB 20/mt ($2.8/mt) higher since the beginning of this week, according to SteelOrbis’ data.
Ex-India hot rolled coil (HRC) have increased slightly to $575-610/mt FOB, with a midpoint standing at $592.5/mt FOB, up by $2.5/mt week on week. However, optimism has been fading by limited deals being concluded, while business activity in the Gulf has been showing no considerable improvement. More specifically, customers in the Gulf region have been reporting a persistently low end-user demand, which resulted in slow activity again this week. Indicative offers for ex-India HRC in the UAE have been reported at $620/mt CFR, up by $10/mt week on week, though no fresh deals have been reported so far. At the same time, although the higher end of the range corresponds to ex-India HRC offers in Europe, most of the deals were concluded at lower levels so far, at around $600-605/mt FOB in particular. More specifically, following several deals for ex-India HRC in Europe at $660-665/mt CFR last week, most offers have been reported at $670-675/mt CFR Antwerp and $665/mt CFR southern Europe.
In Vietnam, this week local producer Formosa Ha Tinh Steel has announced its new prices for local HRC for August-September shipments, raising them by $10-15/mt compared to the previous month to $595-615/mt CFR. The more bullish views of Chinese and other HRC suppliers seen in late June-early July have supported the producers’ move, although most market insiders believe that new prices are too high for most local buyers so far. At the same time, import HRC prices have continued to fluctuate this week, given lower offers from Chinese traders at the beginning of the week, and slight price improvement seen at the end of the week on futures prices recovery. As a result, by the end of the week the SteelOrbis’ reference price for import SAE1006 HRC in Vietnam rolled back to last Friday’s $575/mt CFR level, versus $570-575/mt CFR at the beginning of this week.
In Europe, despite some improvement in the sentiments in the past week, the range of domestic HRC offer prices has remained mainly unchanged given still slow trading as most spot sales have been mainly done for only small tonnages. Specifically, achievable HRC spot prices have remained at €650-680/mt ex-works, with the lower levels recorded in Italy and the higher levels in northern Europe. However, offers from European mills have remained at stably high levels, standing at €670-700/mt ex-works for September delivery from Italian mills and at around €700/mt ex-works for September-October deliveries from mills in northern Europe. At the same time, business activity in the import segment has been muted, with most offers moving on a stable trend compared to the previous week, though some discounts for ex-Asia HRC have been voiced in southern Europe. Most import offers have remained at €610-645/mt CFR for September-October deliveries, depending on supplier. In particular, offers for ex-Vietnam HRC have been heard at €610-615/mt CFR from traders, same as last week, but at €600/mt CFR directly from a mill, sources said. Meanwhile, offers for ex-India and ex-Egypt HRC have been estimated at €610/mt CFR, but according to European traders, €600/mt CFR level is estimated as more realistic. However, suppliers from Japan and South Korea have continued to offer their materials in Spain at the higher level among all suppliers, at €630-640/mt CFR and €645/mt CFR, respectively.
In Turkey, the business activity has remained dull as the demand is still not sufficient for the HRC producers. Moreover, the local re-rollers have decreased their offers for the domestic coated and CR market and have gone even more aggressive for exports. The lowest CRC export base price has been reported at $730/mt FOR while in the local market the suppliers are trying to hold on to $770-800/mt ex-works base. The pressure from the re-rollers side has pushed down the domestic HRC prices in Turkey to $670-690/mt ex-works, while earlier the suppliers had been targeting $700-715/mt ex-works. According to some suppliers, large customers are bidding at $630/mt ex-works. In addition, although the import side remains non-aggressive in terms of pricing, but still the offers from China dropped by $10/mt to $580-590/mt CFR and $10/mt lower levels are also possible. India is at $610/mt CFR while Russian offers are still not present in the Turkish market.
In the UAE, even though the gloomy outlook has continued exerting a negative impact on trade, HRC suppliers are still working to keep their offers same. Currently, ex-China SS400 offers have stayed unchanged at $590-600/mt CFR for September shipment. On the other hand, although certain market sources say that some Indian suppliers offer around $620/mt CFR, the majority of mills are still not offering since unfavorable conditions have continued in the local market of the UAE. Similarly, ex-South Korea has remained silent and unwilling to give HRC offers since trading activity with the UAE is not lucrative.