This week, the situation in the global hot rolled coil (HRC) market has been positive as suppliers in most regions have continued to increase their prices. Specifically, Asia-based sellers have remained bullish in talks not only with their regional buyers but also in relation to distant markets. Furthermore, both in Turkey and Europe, where local HRC prices have continued to increase, import HRC deals for ex-Egypt materials have been reported at higher levels this week.
Turkish HRC prices have risen further this week amid restocking activity seen in the past week. In fact, some buyers have accepted prices in the low $700s in the domestic market, needing to buy domestic origin feedstock amid slow coated and cold rolled export sales. As a result, also considering rising Asian offers, the return of the EU with higher local prices and still firm scrap prices, Turkish mills increased their local HRC offers to $720-740/mt ex-works and even $750/mt ex-works base has been heard at the end of the week. Export offers, however, have been mainly reported at $700-730/mt FOB. In the import segment, activity has slowed down, following the ex-China sales done at $635-650/mt CFR earlier in January. The import offers from China increased in a couple of steps to $670-675/mt CFR, while ex-India offers have hit $700/mt CFR minimum, up $15/mt over the past week. An Egyptian mill is reported to have offered at $700-710/mt FOB or around $730-740/mt CFR, which is a big increase since the previous large sales at $680-690/mt CFR. Russia is not fully in the market due to limited HRC availability, but some sources expect Severstal to offer at $640-650/mt CFR and NLMK to return with offers at $710-720/mt CFR.
Business activity in the European HRC market has been reviving gradually after the long Christmas and New Year holidays, with local and most import HRC prices increasing since the last week of the year, driven by better demand and reduced output in the EU region, and particularly by the firm uptrend globally. In particular, HRC offers from European mills have been evaluated at €700-720/mt ex-works, up by €50-60/mt over the past week. However, both customers in southern and northern Europe estimate workable prices at around €700-720/mt delivered, which means around €680-700/mt ex-works. At the same time, import offers have remained rather competitive, though they have also indicated rises this week. As anticipated, Indian suppliers have increased their offers to €670-680/mt CFR southern Europe, up by around €40/mt week on week. Meanwhile, offers for ex-Egypt HRC have been reported at $725-745/mt CFR (€675-695/mt CFR) southern Europe, with a few deals reportedly signed at €670/mt CFR Italy and around €680/mt CFR Spain. Offers from Asian suppliers, like those from Indonesia and Taiwan, have increased as well, by up to $50-60/mt over the past two weeks, reaching around €690-700/mt CFR southern Europe. Besides, offers for ex-South Korea HRC have been heard at €720/mt CFR Spain.
In China, HRC export prices have edged up amid the rising trend of local and futures prices coupled with the increased strength of the Chinese currency against the US dollar. In particular, export offers for boron-added SS400 HRC given by major Chinese mills are at $620-630/mt FOB for February and March shipments, with a midpoint at $625/mt FOB, up by $22.5/mt week on week. Besides, some big mills have increased their offers to $635/mt FOB by the end of the week. Meanwhile, the tradable level for SS400 HRC has been heard at $600-610/mt FOB, up by $10/mt week on week. Besides, according to market sources, numerous batches of small tonnages have been sold at $600-605/mt FOB to such destinations as the Middle East, South Korea and South America. At the same time, during the given week, HRC prices in the Chinese domestic market have indicated rises as supply of HRC has shrunk due to the maintenance works of HRC producers during the winter. Domestic HRC prices in China are at RMB 4,120-4,230/mt ($613-629/mt) ex-warehouse on January 13, with the average price level RMB 55/mt ($8/mt) higher than that recorded on January 6, according to SteelOrbis’ data.
Following Formosa’s Ha Tihn Steel announcement to increased domestic HRC prices by $30/mt month on month to $635-640/mt CFR on Monday, January 9, prices in the import HRC market in Vietnam have posted another increase this week. However, Vietnamese buyers have not been in hurry to sign new deals given the sufficient level of stocks and more attractive local prices even though all foreign suppliers have been bullish in their new offers in Vietnam. More specifically, the prices available for ex-China SAE1006 HRC have been voiced at $650-660/mt CFR, compared to 635/mt CFR at the beginning of the week and are up by $25-30/mt week on week. Meanwhile, new offers for ex-China SS400 and Q125 HRC have settled at around $630/mt CFR, up by 10-15/mt since the beginning of the week and versus $600-610/mt CFR last week. Meanwhile, other suppliers have decided to go higher as well this week. Offers for ex-India SAE1006 HRC have been voiced at $650-670/mt CFR, versus $630/mt CFR last week. Besides, offers from South Korea and Taiwan have settled at $650/mt CFR, up by $20/mt week on week. Thus, the reference prices for import SAE1006 HRC in Vietnam, based on the most competitive offers, have come to $650/mt CFR, up by $25-30/mt week on week.
Having completed an upward revision in domestic prices and given higher export allocations for the last quarter of the current fiscal year, Indian mills have started submitting significantly higher offers and, although only a few successful deals were reported, the mood regarding export sales has been buoyant. Several leading integrated mills have managed to confirm new tradable prices for ex-India SAE1006 2mm HRC at $620-630/mt FOB, which is up from the deal levels in the range of $595-610/mt FOB two weeks ago and $610/mt FOB fixed late last week. The new prices have been confirmed in a few deals to the Gulf and Asia. Moreover, all new offers have not been below $640-680/mt FOB, with the higher end of the range corresponding to offers to the EU.