The general price sentiment in the global hot rolled coil (HRC) market has been quite negative this week, given still slow demand in many regions and yet another sharp drop in Chinese HRC futures prices, resulting in lower deal prices globally. However, just before the one-week holiday, Chinese HRC futures prices have shown a slight recovery, though most market insiders doubt any significant rise in ex-China prices will be seen after the holiday. More pessimism has also been seen in Europe this week. Indian suppliers, however, have continued to keep their export offers stable, focusing on boosting sales to their local market.
Export offers for Chinese HRC both from traders and big mills have shown a slight decrease this week given the sluggish demand ahead of the eight-day national holiday (September 29-October 6). Export offers for boron-added SS400 HRC from large Chinese mills have settled at $550-565/mt FOB, with a midpoint at $557.5/mt FOB, down by $5/mt week on week. This decline is mainly explained by the decrease in HRC futures prices caused partially by concerns over steel demand and the almost finished pre-holiday restocking of raw materials and finished steel, including flat products. Meanwhile, the tradable level for SS400 HRC, which increased at the beginning of last week, and dropped by $10/mt to $535-550/mt FOB by the end of last week, by Tuesday, September 26, was estimated at $530-550/mt FOB. However, most bids from customers, especially those in Asia, have been voiced at $520-525/mt FOB. According to sources, some trade activity has been heard in South Korea, with several batches totaling around 30,000 mt of ex-China SAE1006 and SS400 HRC sold at $560-565/mt CFR.
Before closing for the holiday, Chinese suppliers have decreased their offers for SAE1006 HRC to $568-570/mt CFR in Vietnam, down by $2-5/mt week on week. According to sources, a deal for around 5,000 mt has been reported at the lower end of the range, though, in general, trade has remained muted in Vietnam amid the lack of demand in the country. Meanwhile, several deals for ex-China Q195 HRC have been reported at $532-535/mt CFR, versus $540/mt CFR last week. Besides, most offers for ex-China SS400 HRC have been voiced at $535-540/mt CFR, versus $540-545/mt CFR last week. According to sources, although by the end of the week Chinese HRC futures prices have recovered to some extent, the downtrend of ex-China offer prices is expected to persist after the Chinese national holiday.
Ex-India HRC prices have been kept unchanged at $590-620/mt FOB over the past week as local sales have continued to remain centre-stage for mills owing to better price realizations. Indian mills have kept refraining from submitting offers to the Gulf region and Vietnam, while trade activity has also barely been kept alive in Europe due to slow demand in the region. Meanwhile, according to sources, domestic demand is rising daily and is expected to be sustained through the festive season starting next month. Indian mills are not expected to make any significant export allocations for the October-December quarter.
This week has continued to be weak in terms of HRC demand and consequently in pricing in Europe, with tradable HRC offers estimated at €620-640 ex-works in northern Europe, down by €10/mt week on week, while achievable prices in Italy have been voiced at €615-625 ex-works, versus €620-630/mt ex-works last week. At the same time, according to sources, European buyers’ bids have been reported at as low as €600-610/mt ex-works, with some even at €590/mt. As for the import sector, it has continued to be mainly silent given safeguard-related risks and the smaller gap with prices of local material. Indications for import offers have been estimated at €585-610/mt CFR, versus €610-635/mt CFR last week, with the lower end of the range corresponding to ex-Vietnam HRC offers in Italy.
The HRC market in Turkey has seen little change this week both in terms of domestic market activity and prices. The demand has remained moderate and import scrap prices have also revealed a certain stabilization. As a result, the local HRC price range in Turkey is still at $650-670/mt ex-works, although some mills are voicing higher levels. The material is available for November and December deliveries, and so mills are not in much of a rush to sell for now. However, buyers believe prices may soften a bit in the coming days, mainly due to the $10-20/mt discounts provided in the coated steel sector. Some market sources report the $640/mt ex-works is already available from domestic mills for sizeable orders. In the import segment, early this week China was offering at $570-580/mt CFR for Q195 material for November shipments, but no deals have been reported. Chinese suppliers are now on holiday and so not much movement is anticipated in the Turkish market.
In the UAE, due to their need to restock, Emirati consumers have continued to buy lots, particularly from Japan. As a result of this ongoing interest in imports, South Korean suppliers have now chosen to begin offering HRC to the UAE. According to sources, one Japanese supplier sold 22,000 mt of HRC to the UAE last week at $592-595/mt CFR, while their offers to the GCC stood at $600/mt CFR. Following observations of increased trading activities, South Korean suppliers have opted to provide HRC to the UAE at $590/mt CFR, although no transactions have been heard yet. Meanwhile, Chinese suppliers, having been highly active in trading in the GCC over the past several weeks, have opted to maintain their offers to the UAE unchanged this week at $570-580/mt CFR. In contrast to other suppliers, Indian suppliers have continued to withhold their offerings to the UAE, simply because of the stronger business activity in their domestic market.