A downward trend has prevailed in the global HRC market this week as sentiments in the benchmark Chinese market have worsened again amid the weaker-than-expected stimuli announced by the government and slow GDP growth for the third quarter. Lower prices for Chinese HRC have been fixed in deals to the GCC and Turkey, as well as in the Asian region. The only market that has been showing some stability has been Europe, though even there some slightly lower offers for Asian coils have been heard.
Export offers for boron-added SS400 HRC from large Chinese mills have dropped by $17.5/mt over the past week to $515-525/mt FOB. Some mills are still holding their official offers at $530-540/mt FOB, but these levels are not viewed as reflecting the real market, especially as one of the leading mills has already signed a contract at $515/mt FOB. Moreover, the tradable prices for Chinese origin SS400/Q235 and Q195 HRC have settled at $500-510/mt FOB, down $15/mt week on week. A deal for Chinese Q235 has already been heard to Vietnam at $515/mt CFR, which translates to around $500/mt FOB, versus the previous level at $530/mt CFR heard early this week.
On October 17, Ni Hong, Chinese minister for housing and urban-rural development, stated that China will increase the amount of credit available for “white list” real estate projects to RMB 4 trillion ($562 billion) by the end of 2024. And though the amount of the new expenditure is high - up to RMB 1.77 trillion by the end of the year - market analysts believe it is not enough to change the current weak domestic demand picture, at least in the short term. Moreover, on October 18 it was announced that China’s GDP growth for the third quarter was at 4.6 percent, slower than 4.7 percent in the second quarter and the expected five percent for the full year of 2024.
This week, export prices from Indian HRC suppliers have been showing unclear movements since, on the one hand, higher offers have been heard from Indian suppliers in Europe amid better sentiments locally, though, on the other hand, offer prices from a number of Indian mills and traders in the Middle East have moved down slightly due to slow demand and growing pressure from Chinese HRC suppliers.
Ex-India HRC prices have been widened to $530-565/mt FOB this week, against $540-550/mt FOB last week. Most offers for ex-India HRC in the Middle East have been heard at $580/mt CFR, though this week lower prices at $570/mt CFR have started to appear in the market, which corresponds to $530/mt FOB. Moreover, by the end of the week, with lower offers from China, bids from the GCC have dropped further to $550/mt CFR. At the same time, ex-India HRC offers to Europe have been voiced at around $630/mt CFR, which translates to $565/mt FOB and slightly above, up by $10-15/mt week on week, though no deals have been reported so far due to safeguard and antidumping duty risks in the region, with the last deal reported around two weeks ago at $605-610/mt CFR.
In Turkey, HRC prices in the domestic market have stabilized at $625-640/mt ex-works for December deliveries, while demand has been rather slow, following some lively restocking done earlier. Export HRC prices from Turkey are at $600-610/mt FOB in official offers, with $585-590/mt FOB levels considered workable for decent orders. In the import segment, ex-China offer prices have slid to $540-545/mt CFR and at least one 45,000 mt cargo has been booked in this range, sources say. An Egyptian mill is offering at $620/mt CFR, following a $610/mt CFR sale closed last week, while Ukraine has opened HRC offers for Turkey for January shipment at $590-595/mt CFR. Russia is also present in the market with offers at $530-540/mt CFR from a sanctioned producer and $560-575/mt CFR from a non-sanctioned producer. According to sources, large volumes were sold from Russia to Turkey a couple of weeks ago at $500-510/mt CFR.
In the GCC, following declines in ex-China HRC prices amid futures price fluctuations, there has been some trade activity this week for Chinese materials. Chinese suppliers sold 45,000 mt of HRC to the GCC at $555/mt CFR. The current SS400 offer prices from China to the UAE are at $550-570/mt CFR, which is lower than the $580-600/mt CFR offered last week. Furthermore, Indian suppliers that have been active in the GCC market in recent weeks have been offering HRC to the GCC for $570-580/mt CFR, as compared to $540-550/mt FOB last week. In contrast, South Korean and Japanese suppliers are still not offering to the GCC, but are just keeping an eye on the market.
In the EU HRC marker, according to sources, there has not been much change seen over the past week, while demand has remained generally at insufficient levels. Buyers are trying to get a clearer picture of the Asian market situation, after the stimulus announcements which were, however, followed by a significant slump in prices. As a result, domestic HRC price indications in the EU have remained at €540-590/mt ex-works. Most sources have been reporting that EU mills are finding it hard at the moment to achieve their price increases announced earlier, while buyers are restocking only according to their urgent needs. In the import segment, the general level of offers has remained at €550-580/mt CFR, mainly from Asia. In particular, according to sources, some ex-Vietnam offers have been voiced at €560/mt CFR. Ex-Egypt offers have been at €575/mt CFR for January deliveries.
