The last week of January has witnessed a positive trend in the hot-rolled coil (HRC) market across the world given a certain demand revival in most consuming regions. In the CIS and Turkey, the allocation for HRC is limited, and so mills are not under pressure and are seeking higher levels in new sales. The European market also expects a price rise to be announced, which will support local and import suppliers, providing the necessary boost to the restocking process. In Asia, ex-India offers have increased as expected, in line with better domestic demand. In the meantime, China has left for its holiday period.
CIS-based HRC exporters have been barely present with offers this week as some of them are waiting for further developments in the Turkish market. In particular, NLMK has just been watching the situation and will most probably announce its offers next week close to $850-860/mt CFR Turkey. Russia’s Severstal has a limited allocation to sell for March after earlier deals and is aiming to sell at $900/mt FOB Baltic Sea. MMK, in its turn, has not been offering HRC this week after voicing $810/mt FOB last week. According to sources, the producer is short on allocation due to decent local demand and scheduled repairs at its converters. In the meantime, Ukraine’s Metinvest sold over 20,000 mt of HRC this week at $840-850/mt CFR Turkey.
In the EU, domestic HRC prices have remained relatively stable over the past week, while the market mood has been cautiously optimistic, given the lower competition in the import segment and certain settlements between local producers and end-users. Leading producer ArcelorMittal has increased its hot rolled coil (HRC) offers by €30/mt to €970/mt in the northern European market, sources told SteelOrbis today, January 28th. The reason for the increase are the higher production costs, the same sources commented.
On January 26, the European authorities announced they will not impose a provisional measure in the framework of the antidumping investigation regarding corrosion-resistant steel imports to the EU, which means there will only be the definitive measure which will be set in August this year. The news has had a positive effect on market sentiment in Turkey, since now re-rollers have regained the possibility to export coated steel to Europe over the coming several months.
The HRC market in Turkey has shown a sharp uptrend this week. The main reason is the production cuts caused by power shortages, which have been imposed by the government on local industries. According to sources, some mills have canceled one shift, while some have decreased production by several hours per day and others have decided to reduce production by 50 percent. This situation has resulted in buyers’ fears that HRC allocation will be significantly limited. Later on, the EU announcement regarding the AD investigation on the corrosion-resistant steel triggered an increase of around $100/mt in Turkey’s coated and cold-rolled steel prices. This uptrend, in its turn, has resulted in a further price rise for HRC, as suppliers have seen increased demand as a result of active restocking. Local HRC prices in Turkey have in a few separate steps increased by $45/mt this week and reached the psychological level of $900/mt ex-works.
The price uptrend in Vietnam’s HRC import market has gathered pace. At the beginning of the week, the prices for import SAE 1006 HRC increased by $35-40/mt to $790-800/mt CFR mainly because of higher offers for Chinese and Indian material. Although exporters were ready to sell promptly in the last couple of weeks, their mindset has changed since the market started to expect a sharp rise after the Lunar New Year holiday. As a result, by the end of the current week offers have reached $800-810/mt CFR. The uptrend is expected to persist after the holiday period given the bullish mood of the main exporters.
Indian mills have continued to hike HRC export prices this week given their strong confidence in the price uptrend. The positive outlook in the local Indian market and the better mood in the major importing markets have supported the recent increase from Indian sellers. There was a confirmed deal to Turkey for ex-India HRC at $810/mt CFR last week, while by the end of this week offers to Turkey have already been voiced at $860/mt CFR. Also, there have been discussions in the market about a booking of an ex-Indian HRC cargo to a Emirati trader at $810/mt CFR. Thus, the latest rare deals have already been at $760-770/mt FOB and Indian mills are already trying for higher levels. The latest offers to Vietnam from Indian mills have been voiced at $810-820/mt CFR, which translates to $780-790/mt FOB.
In China, the trend has reversed this week with export prices for boron-added SS400 HRC adjusted upwards by $10/mt over the past week, with a midpoint at $780/mt FOB. The main reason is the recovery seen in futures prices. By the end of the week, most Chinese mills and trading companies have withdrawn from the market. Domestic HRC prices in China are at RMB 4,885 ($768/mt) ex-warehouse on January 28, up slightly by RMB 25/mt ($4/mt) as compared to January 21, according to SteelOrbis’ data. It is expected that HRC prices in the Chinese domestic market will remain stable in the coming week because of the holiday, but some rebound may be seen when the holiday period is over.
