Global View on HRC: Optimism on prices still losing momentum in most regions, except Europe, due to declines in China  

Friday, 31 March 2023 17:46:26 (GMT+3)   |   Istanbul
       

The mood and the price trends for hot rolled coil (HRC) in Asia have been demonstrating a certain pessimism, exerting pressure on other regions globally. The overall market situation in Asia has becoming more negative with prices going down from Chinese traders and also mills, while in India sellers have kept their prices largely stable for European buyers but have started to offer lower in the Gulf region as competition has been tightening there. In Turkey, buyers have been mainly staying away from purchases despite the sharp price drops from China, which in turn have also been blocking the sales of HRC of other origins like Russia. At the same time, European HRC mills are aiming to increase their HRC offers further to €900/mt ex-works in the coming weeks, even though most market insiders doubt the sustainability of the upward price trend, as most buyers have kept avoiding large-volumes purchases, while import HRC has been becoming more attractive in the region.

This week has brought another fall in ex-China HRC offers following the decrease in futures prices and local HRC prices in China. In particular, export offers for boron-added SS400 HRC given by major Chinese mills have come down to $660-680/mt FOB, with a midpoint at $670/mt FOB, down by $10/mt over the past week. In addition, market insiders have fears that the trend will continue for a good while as Chinese traders have continued to offer and sell HRC position cargoes in the export market at much lower prices.  Notably, the tradable level for ex-China SS400 HRC has been heard at around $615-640/mt FOB, versus $625-640/mt FOB last week, with the lower end of the range corresponding to offers in Vietnam at $625-635/mt CFR, down by $5-10/mt week on week. Besides, according to sources, Vietnamese customers are reported to have bought several small batches of ex-China materials at $625-630/mt CFR. Meanwhile, more deals for ex-China SS400 HRC have been reported in Pakistan as well. Thus, following a deal for around 3,500 mt of ex-China HRC at $660/mt CFR, the material has changed hands at $650/mt CFR. This means the deal prices are mainly the same as at the end of last week. Furthermore, ex-China Q195 and SS400 coils have been offered in the Middle East and Turkey at around $675-690/mt CFR, being the most competitive among other suppliers in the markets. Moreover, according to Chinese traders, Chinese mill Anfeng Steel has been offering its HRC Q235B, 2 mm and above, at $665-670/mt CFR UAE. Domestic HRC prices in China are at RMB 4,390-4,4440/mt ($639-646/mt) ex-warehouse on March 30, with the average price level RMB 5/mt ($0,73/mt) lower compared to that recorded on March 23, according to SteelOrbis’ data.  

In Vietnam, most customers have been showing very limited interest in HRC imports over the past week even though more discounts have been provided by Chinese traders this week. In particular, offers for ex-China SS400 HRC have been heard at around $635-645/mt CFR, versus $635-650/mt CFR last week. However, several market insiders have reported purchasing a few batches of around 2,000 mt each at $625/mt CFR for May shipment at the beginning of this week. This means the deal prices have lost $5-10/mt week on week. At the same time, the prices available for ex-China position SAE1006 HRC have been voiced at $680-695/mt CFR, compared to $680-710/mt CFR last week, though no new deals have been reported so far. Meanwhile, other suppliers have continued to refrain from offers in Vietnam, with the indicative offers for HRC from Japan, Taiwan and India standing at around $730-740/mt CFR, the same as last week. The SteelOrbis reference price for import SAE1006 HRC has remained at $680-685/mt CFR, the same as last week, given no deals were signed at new levels over the past week. 

Most Indian HRC mills have kept their export prices largely stable, adopting caution over the fall in trade and the achievable prices in the Middle East and Vietnam. However, since demand from the EU region, where Indian sellers have been focusing for months, is insufficient, lower ex-India offers have been heard in the Gulf region this week. Ex-India HRC prices have settled at $720-770/mt FOB, versus $740-770/mt FOB at the end of last week, with the lower end of the price range applicable for offers in the Middle East, the UAE in particular, at around $750/mt CFR, where buyers were heard to be shifting to cheaper alternatives like ex-China. Even lower prices have been reported to Turkey, but, since the competition is tough no deals at lower levels have been done. In the meantime, the higher end of the range corresponds to ex-India HRC offers in the EU, which have been voiced at around $830-840/mt CFR both in northern and southern Europe, the same as last week. According to sources, following several big deals for ex-India HRC in the region last week at $820-830/mt CFR, new bookings for above 30,000 mt in total have been reported at $830-840/mt CFR. 

In the UAE, even though Emirates’ end-user demand has remained sluggish, some bookings at lower levels have been reported since HRC import prices have begun to drop. Accordingly, ex-China SS400 offers for May shipping have dropped by $20-40/mt to $680-710/mt CFR, while another mill is stated to have been providing the same shipment term for Q235B HRC of 2 mm and higher for $665-670/mt CFR. Also, during the week, a booking for 3-12 mm S235JR at $700/mt CFR was reported from China to the UAE. Meanwhile, although Indian mills are not really eager to sell to the UAE due to increased business activity in the European market, some fresh offers have been heard this week at $745-750/mt CFR, a $5/mt decrease from the previous week. Moreover, in light of the UAE's poor feelings towards the HRC market, South Korea has preferred not to provide to the UAE and instead has focused on other regions with stronger trade activity. Currently, South Korean export offers are at $800/mt FOB for May and June shipments, which are about $850/mt CFR with freight at $50/mt. 

Buying activity in Turkey’s HRC market has still been slow this week as buyers are not in a rush to negotiate for new cargoes since they had restocked enough earlier. In the meantime, end-user demand is quite weak and so there is low interest in new purchases. In addition, a lot of import cargoes are on the way, specifically from China and Russia, as a result of panic buying activity seen at the end of February and in early March. As a result, domestic mills are keeping their HRC offers at $850/mt ex-works officially and $10-20/mt lower is considered possible from some producers and for large buyers. The producers are in the market to sell for June-July deliveries and, since there is not much demand for such a lead time, they believe large discounts will not create strong sales activity yet. The high stocks and slow pipe, CRC and coated steel sales in Turkey are also behind the low import demand for HRC. Even China, which is now offering $675-685/mt CFR for Q195 grade and around $710-715/mt CFR, which is around $10-15/mt down over the past week. Although these offers are way below the prices for other origins, the sellers report there is no activity from the Turkish buyers’ side. The closest offer is from a sanctioned Russian mill at $730-740/mt CFR, while Asian origins are at $760-800/mt CFR minimum and at $850/mt CFR ex-Egypt. The increase of duty for import flats has once again been postponed, this time until May 1. The postponement will affect cargoes currently on the water, but will not impact sales with long lead times.  

Domestic prices in the EU HRC market have remained at €850-870/mt ex-works, with workable prices in Italy standing at €850/mt ex-works and above, up by €20/mt week on week, with the official HRC offers from southern European mills voiced at €850-870/mt ex-works for mainly June deliveries. In northern Europe, prices from mills have been heard at €850-870/mt ex-works for June and July deliveries, the same as last week. At the same time, this week the market has been actively discussing reports that European mills are aiming to increase their HRC offers further to €900/mt ex-works in the next round, though buyers have been insisting there is no room for further growth. At the same time, according to sources, more clients have started to look at more attractive imports as the lead times from some suppliers are more or less the same as from local mills. Import HRC offers in southern Europe have remained at €750-790/mt CFR, depending on the origin and destination, versus €750-800/mt CFR last week. However, some suppliers, like those from Japan and South Korea have been providing discounts in new offers to Europe at €770-780/mt CFR, down by €20/mt week on week. Offers for ex-Vietnam HRC are unchanged at €770/mt CFR, while, according to sources, several deals for ex-Indonesia HRC have been signed at €755-765/mt CFR Spain this week. 


Similar articles

US sheet prices tick up modestly ahead of Easter weekend

28 Mar | Scrap & Raw Materials

Flat steel prices in local Taiwanese market - week 13, 2024

28 Mar | Flats and Slab

European HRC prices keep falling, demand still shows signs of fatigue

28 Mar | Flats and Slab

Vietnam’s Hoa Phat and Formosa seek AD investigation on Chinese HRC

28 Mar | Steel News

Major steel and raw material futures prices in China - March 28, 2024

28 Mar | Longs and Billet

UAE’s HRC market still sluggish, offers from India fall slightly

27 Mar | Flats and Slab

Import HRC prices in Vietnam retreat again due to slump in China

27 Mar | Flats and Slab

Vietnam’s Hoa Phat produces nine millionth mt of HRC

27 Mar | Steel News

Major steel and raw material futures prices in China - March 27, 2024

27 Mar | Longs and Billet

HRC consumption in Mexico up 30.6 percent in January

26 Mar | Steel News