- The price positions of the main hot-rolled coil suppliers globally have continued to weaken due to various factors. In the EU, the lack of the local restocking activity has led to another decline in workable local HRC prices. Moreover, the situation with the quota and the volumes to be customs-cleared remains a question mark. In Turkey, the deteriorating financial situation has been weighing on business activities and demand, bringing down prices over the past week. In Asia, the downward price move by India aimed at selling HRC to the region has resulted in a significant decrease in local prices in Vietnam. In China, export sentiment has not improved this week despite the upturn seen in local prices. In the meantime, in the CIS HRC segment only a few mills have been relatively active this week.
- CIS-based HRC exporters are sold out for January shipment volumes and are gradually starting to offer for February in the new round of sales. While NLMK and MMK have been out of the market for a while now and, according to sources, are considering their possible price offers for the new month of production, Ukraine’s Metinvest has traded its remaining January production volumes to Turkey and is already voicing offers for February at $815-835/mt CFR with freight estimated at around $30-35/mt. Russia’s Severstal has closed January with $10-20/mt discounts on the initially targeted price and the same level of $890-940/mt FOB is being offered for February. Taking into account the limited allocation (around 90,000 mt) to be exported, the company aims to sell mainly to Europe.
- In the meantime, in the EU the workable prices for HRC locally have continued to drop, down around €15/mt on average to €840-880/mt and €890-940/mt respectively in the Italian market and in northern Europe. Buyers remain cautious in the falling market and amid the approaching holiday period, and so the restocking process is slower than usual in the EU. Moreover, the situation in the import market has started to take its toll on the local price outlook in the EU since it is not quite visible when the incoming volumes will be custom-cleared and also it is not clear what the real situation is regarding volumes waiting at the ports for clearance under the current quota.
- In Turkey, HRC prices have dropped by $10-20/mt in the local market and by up further domestically as business operations have been severely hit by an even worse situation with the lira plunging further against the US dollar. Exports have also remained scarce due to Turkey’s limited presence in the EU amid the unclear quota situation, with only small cargoes recently traded to Italy. Egypt has also supported Turkish mills somewhat, but once again the traded volumes have been insufficient for the current market situation. In the import segment, competition is not tight as Russian mills are not yet in the market to offer for February, while an ex-Ukraine supplier recently closed sales for January shipment volumes at $815-830/mt CFR and is slowly starting to offer for February at $815-835/mt CFR depending on the coil weight. Some deals were heard from India in Turkey last week at $835/mt CFR, but the workable levels have recently fallen by at least $20/mt over the past week.
- Apart from the deals to Turkey, ex-India HRC exporters have been concentrating on the GCC market, specifically having sold at least 40,000 mt at $825-840/mt CFR, i.e., with the FOB level at around $785-800/mt. In Asia, however, Indian sellers have been forced to be more aggressive, given the generally negative market. Deals for SAE1006 HRC to Vietnam have fallen to as low as $790/mt CFR, versus the lowest offers seen at $815-820/mt CFR earlier. Overall, most ex-India HRC prices have been cut to $750-760/mt FOB, but Asian buyers’ bids are still mainly on the lower side.
- The market situation in Vietnam has remained negative for HRC with two major local suppliers cutting their domestic offers this week, following the low-priced import transaction from India at $790/mt CFR. Formosa Ha Tinh has cut its SAE1006 offers by $60/mt over the past month to $820/mt CFR for non-skin-passed and to $885/mt CFR for skin-passed HRC. The producer’s prices for SS400 HRC have been set at $815/mt CFR. Hoa Phat Group has even gone below the mentioned level in its new offers, setting its price for SAE1006 and SS400 HRC at $794-798/mt CFR, down by $41-42/mt over the past month. Moreover, slightly lower levels have been already discussed as achievable.
- The local HRC market in China has posted an increase by the end of this week with the average price RMB 95/mt ($15/mt) higher than late last week at RMB 4,860/mt ex-warehouse. Despite the increase, sentiment in the export market has not improved over the week and, after the decline early this week, prices of FOB basis have been stable, with export offers for boron-added SS400 HRC given by major Chinese mills at $780-800/mt FOB for February shipment, with a midpoint at $790/mt FOB, moving down by $20/mt compared to December 7. The tradable price level for SS400 coils has lately been heard at $775-785/mt FOB from mills. In addition, a trader has sold a cargo of SS400 coils at $765-770/mt CFR, with the freight assessed at $30-35/mt. The shipment is expected to be in February.
