Market sources have been mainly cautious in their expectations regarding HRC pricing this week, taking into account uneven trends seen in different regions. While the US-EU Section 232 dispute being settled brings some optimism to the market, the falling prices in China and Asia overall make market participants cautious and create bearish sentiment in the market. In addition, Turkey is not doing well financially and economically, which may result in some price downturn in the coming weeks, although for now the local mills have managed to maintain their positions.
- The CIS-based HRC producers have been focusing mainly on their sales to the EU and the MENA region, specifically taking into account the weakening of the Asian markets. Russia’s Severstal has increased its offers for December production and managed to sell some lots to the northern part of Europe, planning to trade around 100,000 mt overall of December production. MMK has already closed December production sales with around 200,000 mt in total, mainly traded to Asia, Turkey and the MENA region. NLMK and Metinvest have also started selling for December, being traditionally focused on the Turkish and North African markets.
- In Turkey, the market remains affected by currency fluctuations and slow exports, though domestic prices have remained firm at $930-940/mt ex-works and above. Mills are seeking to sell for January deliveries while buyers are taking their time to evaluate the market situation. Ex-CIS HRC has been sold at $900-910/mt CFR recently for around 60,000 mt in total, while overall import offers have been reaching $915-920/mt CFR this week. The mood is mainly downward, given the slow coated steel sales ex-Turkey and the overall unfavorable financial situation in the country and its effects on steel business activity.
-In the EU, the prices seem to have started rebounding since workable levels have pulled up this week both in the northern and southern regions. Buyers have started to restock, thus giving some positive boost to the market mood. Moreover, a lot of market players believe that ArcelorMittal will increase its local prices in the EU, giving some space to imports as well. In addition, the announcement regarding the US abolishing the 25 percent tax for Europe and substituting it with a quota has brought some optimism to the steel segment, although the effect will most probably be seen in the mid-term and not immediately.
- In total, ex-China SS400 HRC prices (from mills) have fallen by $90/mt this week, to $840-860/mt FOB by Friday. At the same time, traders have become much more active, offering in short positions at lower prices - $820-830/mt FOB and even at $800/mt FOB for coils for shipment in February and beyond. Very big declines in futures and local prices have caused export prices to fall.
At the same time, more active competitive offers from China and the already increased number of deals have increased fears regarding the possible introduction in China of export duty for HRC (and other flat steel production) at 10 percent at the lowest.
- Low-priced ex-China HRC prices have impacted the Vietnamese HRC market, where the reference price for imported SAE1006 HRC has dropped by $47.5/mt to $845-860/mt CFR. In addition, an Indonesian mill, Dexin Steel, has started offering HRC to Vietnam for the very first time. An offer was heard for 20,000-30,000 mt of Q195L/SPHC 2-3 mm HRC at $810/mt CFR for December shipment. The low price level is due to the “not very stable quality for now.”