This week, the situation in the global hot-rolled coil (HRC) market has been positive as suppliers in most of the regions have continued to increase their prices. Specifically, Asia-based sellers have remained bullish in talks with their regional buyers, but still the uptrend in nearby markets is not yet steep enough for Indian, Indonesian, Vietnamese exporters to disregard the opportunity to sell to distant markets. Specifically, the price levels in Europe, where the uptrend of prices has continued, have resulted in large transactions to Italy. Turkey has also been receiving offers from Asia for HRC and some negotiations are heard, especially taking into account the scarcity of ex-CIS allocation.
HRC availability from the CIS has been limited, as some of the sellers, namely, the Russian ones, have closed sales for March production and are not in a rush to trade their scarce allocations for April. MMK is still out of the market with barely any HRC volume offered for exports, while NLMK prefers to wait for now. Severstal has decided to increase its prices by at least $30/mt in offers for April production and has announced $1,000/mt FOB Baltic region, aiming to sell to the north of the EU. Ukraine’s Metinvest has been in talks mainly with Turkish HRC buyers at around $905-915/mt FOB, with no large deals reported this week.
Pricing in the Turkish HRC market has stabilized this week, partly as the mills have run out of supportive factors and also due to certain worries regarding China’s raw material situation and its potential impact. The local prices have been fixed in deals at $950-955/mt ex-works this week, while offers have reached $970-980/mt ex-works, all for May deliveries. In the import segment, ex-Asia offers have been reported at $920-960/mt CFR, with the lowest offer belonging to Indonesia and the highest ones from South Korea. As for ex-CIS offers, only a Ukraine-based mill is in the market to sell, offering a stable price of $930-940/mt CFR depending on the coil weight, for April shipments. In terms of exports, the offer level for HRC is at $930-940/mt FOB Turkey, while moderate discounts are considered possible.
In the European HRC market, domestic workable levels have continued to climb in Italy specifically, up by €30/mt over the past week to €870-900/mt ex-works. The main reason is the decent demand coming from the consuming segments, coupled with rising production costs. The more positive price situation in Italy has naturally widened the import opportunities for local buyers. In fact, a large HRC cargo has been booked from Vietnam to Italy this week, while last week several deals were done for ex-India HRC. The suppliers’ offers have further increased, but they are still at least €40-45/mt lower compared to €900-905/mt CFR offers coming from Egypt and Turkey. In the northern part of the EU, local prices have remained at €940-970/mt ex-works, while mills’ official offers have reached €1,000/mt FOB for HRC.
Vietnamese producers have hiked HRC prices to the local and export markets this week. The increase in prices had been expected by market sources as import prices from all main suppliers have been increasing rapidly in Vietnam since early this month. Major Vietnamese steel producer Formosa Ha Tinh has increased SAE1006 non-skin passed HRC prices to the local market by $90/mt over the past month to $840/mt CFR, while its export offers are at $820-840/mt FOB, depending on the grade of material.
Prices from another Vietnamese mill Hoa Phat Group have risen by up to $92-93/mt this month to $828-832/mt CIF. Moreover, the producer has managed to sell around 30,000 mt of HRC to southern Europe at $945/mt CFR. After the sale, its export offer increased to above $960/mt CFR.
At the same time, most sources have confirmed that the price increases of both Vietnamese producers are slightly lower than initially expected as the aggressive pricing by Chinese traders has impacted sentiments. In particular, in the import segment, the latest SS400 HRC offers from Chinese mills for April shipment were at $840-860/mt CFR, while traders have been offering the material in positions at $815-825/mt CFR. Offers from Indian mills for SAE1006 HRC have been reported at $920/mt CFR and above, compared to $900-920/mt CFR at the beginning of the week.
Indian HRC exporters have continued to push for higher prices in major overseas markets, but trade has been limited amid a combination of a low availability of exportable volumes and the difference in valuations between sellers and buyers. Indian mills have increased SAE1006 HRC prices to $860-870/mt FOB, up by $5/mt on average. However, the latest offers to Turkey from Indian mills have already been voiced at $940-950/mt CFR, which translates to $890-895/mt FOB. Besides, new offers from India to Vietnam were announced at $920/mt CFR and above, which is equivalent to $885/mt FOB, compared to $900-920/mt CFR at the beginning of the week. A deal was confirmed to the EU for ex-India HRC at $930-935/mt CFR last week, while this week Indian mills have been cautious, with offers to this destination hardly below $950/mt CFR.
In China, export prices for boron-added SS400 HRC from large mills have remained mainly unchanged, at $815-830/mt FOB. At the same time, the tradable level for SS400 HRC has dropped to $785-795/mt FOB, down by $15/mt week on week. In particular, a number of traders have been offering position cargoes at much lower levels in Vietnam and Pakistan this week. Several deals have been signed at $820/mt CFR Vietnam this week. Besides, several position cargoes for Chinese SS400 HRC were sold to Pakistan at $840-850/mt CFR this week. Domestic HRC prices in China are at RMB 4,910/mt ($776/mt) ex-warehouse on February 18, down by RMB 165/mt ($26/mt) as compared to February 11, according to SteelOrbis’ data. The demand from downstream users has not been released completely in China.