Chinese mills’ HRC export prices have remained relatively stable ahead of the long Lunar New Year holiday (January 28-February 4), though traders’ offers have rebounded slightly amid the recovery of futures prices. Thus, considering China’s rebound, the mood has improved in Vietnam’s HRC import market as well. However, in other destinations sentiments have not improved so far with ex-India HRC prices still moving down, though with limited success in sales. Besides, Turkey’s HRC market has remained stagnant, with some importers restocking with non-Asian origins, from Egypt and Russia in particular. At the same time, Emirati buyers have showed some interest in importing HRC from China, Japan and India as offers have softened. In the EU, however, HRC mills have been targeting higher prices for the second quarter despite the lack of signs of a demand improvement, while import prices are still hit by trade restrictions.
This week, while most big Chinese mills have kept their HRC export prices stable, some rebound has been seen in offer prices from smaller mills and traders on the back of the recovery of HRC futures prices. At the same time, most market insiders expect more deals to be signed this week before Chinese suppliers leave the market for the long Lunar New Year holiday. Specifically, export offers for boron-added SS400 HRC from large Chinese mills have settled at $465-470/mt FOB, with a midpoint at $467.5/mt FOB, down by $2.5/mt week on week, but remaining at the same level as reported last Friday. Meanwhile, smaller mills have been offering their coils at $460/mt FOB, versus $445-450/mt FOB last week. However, by Friday, January 17, the tradable levels for ex-China SS400/Q235 HRC are estimated at $460-465/mt FOB, versus $455-458/mt FOB at the beginning of the week and against $445-455/mt FOB last week. By January 17, HRC futures prices in China have increased by RMB 171/mt ($23/mt) since January 10, reaching RMB 3,483mt ($484/mt), and up 1.52 percent compared to the previous trading day, January 16.
Although no significant signs of a demand recovery have been seen in Vietnam’s HRC import market this week and though trade for flat products in the main destinations overseas has remained slow, a slight rebound has been seen in import prices from Chinese suppliers since the beginning of this week supported by the recovery of HRC futures prices in China. However, for now the uptrend in Vietnam is shaky and market insiders believe that Chinese HRC suppliers may push their offers up further to secure deals at higher prices before the upcoming Lunar New Year holiday, while any further upward movement after the holiday is doubtful. The SteelOrbis reference price for imported SAE1006 HRC in Vietnam has moved to $495-500/mt CFR, from $475-495/mt CFR at the end of last week, based on offers from China coming at $495/mt CFR, while other foreign suppliers have been refraining from giving offers to Vietnam, with only occasional offers for ex-Indonesia HRC heard at around $500/mt CFR and slightly above. In the meantime, offers for ex-China Q235/SS400 HRC have increased to $472-475/mt CFR, mainly for February shipment, against $468-470/mt CFR at the beginning of the week, and up by $10-12/mt since the end of last week.
Ex-India HRC prices have declined for the second consecutive week to below the $500/mt FOB mark in face of ex-China competition but still with limited success in pushing small-volume deals in the Middle East, Bangladesh and Nepal. More specifically, ex-India HRC prices have declined by $10-25/mt to the range of $490-500/mt FOB. At the same time, Indian mills have been trying for HRC export orders to the Middle East, Bangladesh and Nepal and also to African countries at around $490-500/mt FOB levels, according to sources. Occasional deals have been reported during the past week. According to sources, an eastern India-based mill has reported a trade for 6,000 mt for delivery to Qatar at $490/mt FOB, while another integrated mill is heard to have concluded a trade for delivery of 8,000 mt to the UAE at $486/mt FOB, with these prices translating to around $520/mt CFR and $515/mt CFR, respectively.
Local EU HRC mills, especially those in the north, have been claiming that they are fully booked for the first quarter and are seeking to increase prices up to €620/mt ex-works, which, according to sources, has no possibility of gaining acceptance so far, while workable prices have been voiced at €570-600/mt ex-works with delivery in March. Besides, according to market insiders, offers for HRC from Italy with March delivery have been voiced in Germany at €610-630/mt delivered. Meanwhile, in Italy, offers for March delivery HRC have been voiced at €610-620/mt delivered, which translates to €600-610/mt ex-works, while most buyers are still bidding at €560-580/mt ex-works, the same as last week. Meanwhile, the import HRC market has remained sluggish in recent weeks impacted by various trade restrictions, long lead times, and uncompetitive pricing. Most offers have been estimated at €540-590/mt CFR, compared to €540-560/mt CFR reported last week. More specifically, the lower end of the range corresponds to ex-Indonesia offers at €540-550/mt CFR southern Europe, mainly the same as last week. Besides, indicative offers for ex-Taiwan and ex-India HRC have been estimated at $560/mt CFR, which translates to around €545/mt CFR. However, offers from South Korea have been reported at as high as €570-580/mt CFR. Furthermore, offers from Turkish suppliers have been reported at around €580-590/mt CFR, including duty.
Domestic HRC prices in Turkey have slid from $560-570/mt back to $550-565/mt ex-works base, with demand at quite low levels. Buyers’ expectations are mainly downwards as mills are experiencing pressure from the export segment, particularly from Europe. In addition, many would like wait to evaluate the market situation until after Trump’s inauguration and to see the possible impact specifically on Chinese offer levels. In addition, China will soon exit the market for its long holiday, while in the meantime HRC of this origin remains the lowest-priced in the Turkish market. The price level for Q195 HRC from China has been at $480-485/mt CFR this week and up to $490/mt CFR. In fact, there has been a talk about a deal at $490/mt CFR, but including extras, with extended payment options. Otherwise, many have preferred to restock with lower volumes and with a shorter lead time. Egypt has traded around 20,0000-25,000 mt at $552/mt CFR Turkey, while Russia has sold similar volumes at close to $510/mt CFR.
In the UAE, as hot rolled coil (HRC) import offers have declined steadily this week, Emirati customers in need of stocks have shown interest in imports. As a result, UAE customers bought certain HRC lots from Japan this week at $500-510/mt CFR for March shipment. Currently, offers from Japan to the UAE have settled at $500-510/mt CFR, down from $530/mt CFR previously. Furthermore, as Indian suppliers reduced prices by $15/mt to $515-520/mt CFR this week, buyers in the UAE and Oatar buyers bought some lots. India sold 8,000 mt to the UAE at $486/mt FOB and 6,000 mt to Qatar at $490/mt FOB, which equates to around $520/mt CFR and $515/mt CFR, respectively. On the other side, China has sold 10,000-15,000 mt to the UAE at $480/mt CFR, lowering offers by $10/mt from the previous week. Market participants claim that, even while some deal price levels have dropped below breakeven levels, the previous levels are still being offered at $490-500/mt CFR for February shipment.