The general price sentiment in the global market of hot rolled coil (HRC) has been quite negative this week, given the slower demand in many regions and mostly pessimistic expectations on the raw materials side, particularly scrap. The workable price levels have softened in Turkey given the lack of demand both in the domestic and export markets. In Asia, prices have also been dropping, specifically in sales from Taiwan to Vietnam. However, some markets like India are taking their time to reduce workable HRC prices and Indian mills have even made attempts to slightly push up export offers amid signs of a rebound in Gulf markets.
Business activity in Turkey’s HRC market has been the key driver of the price downturn, following mills’ attempts last week to increase prices. The lack of orders has pushed local HRC prices back to $630-650/mt ex-works in offers and to levels even $10/mt lower in deals. Another factor is that the domestic coated steel and cold-rolled segments have also been suffering from the low level of sales and so have not been providing support for feedstock prices. Overall, although stocks in the market are not high, buyers are careful regarding their purchases, putting pressure on mills’ sales positions. In addition, aggressive import offers from Russia, which are at $560-590/mt CFR, have been exerting additional pressure. HRC exports from Turkey are almost nonexistent due to the absence of Europe, which also does not help Turkish mills to maintain their prices.
In Vietnam, the situation in the HRC market has continued to be bearish this week with buyers signing deals at lower levels for ex-Taiwan coils. In particular, following ex-Taiwan SAE1006 HRC offers announced at $620/mt CFR Vietnam at the beginning of the week, market insiders have reported several deals signed at $603/mt CFR. Besides, another deal signed through traders has been reported at $590-595/mt CFR. Other foreign suppliers have decreased their offers as well, though failing to attract Vietnamese buyers. In particular, ex-China SAE1006 HRC offers have decreased by $20-25/mt since the beginning of the week to around $605-610/mt CFR. Indian offers for boron-added materials have been heard at $600/mt CFR, compared to $610-620/mt at the beginning of the week, while SAE1006 HRC offers from Japan have settled at around $620/mt CFR, down by $20/mt week on week. The SteelOrbis’ reference price for import SAE1006 HRC in Vietnam has settled at $590-605/mt CFR, down $20-35/mt from $610-640/mt CFR last week.
Furthermore, following the downward correction of $45/mt announced by Vietnamese mill Formosa Ha Tinh for October delivery HRC, another major producer Hoa Phat Group has cut its local prices this week. The new prices from Hoa Phat Group, SS400 and SAE1006 HRC, have been reported at VND 14,000/mt, which is $595/mt CIF for mainly October deliveries, down from $615/mt CIF in July for September deliveries coils.
Given poor demand, China’s local and export HRC prices have posted new declines over the past week. Export offers for boron-added SS400 HRC given by major Chinese mills have come down to $610-620/mt FOB, with a midpoint at $615/mt FOB, down by $10/mt week on week. Meanwhile, offers from smaller mills have been at $605/mt FOB, though lower levels have been available in negotiations. At the same time, the tradable level for ex-China SS400 HRC which declined at the beginning of the week to $580-610/mt FOB, depending on the destination, by the end of the week have dropped to $550-590/mt FOB. In particular, by the end of the week, ex-China SS400 HRC offers have been voiced in Vietnam at $580-590/mt CFR, down by $20-30/mt week on week. Domestic HRC prices in China are at RMB 3,880-4,010/mt ($569-588/mt) ex-warehouse on August 19, with the average price level RMB 115/mt ($17/mt) lower as compared to August 12, according to SteelOrbis’ data.
Indian mills have attempted to nudge up HRC export prices slightly amid the signs of a rebound in the Gulf markets seen from early this month. However, buying in most key destinations has remained limited as the fundamentals are still not so strong. Ex-India HRC prices are up slightly to $580-590/mt FOB, compared to $575-590/mt FOB last week. Trade circles have also been discussing a deal for 15,000 mt by an eastern region-based mill at $625-630/mt CFR or around $580/mt FOB with an UAE-based buyer. At the moment, most ex-India offers to the Middle East have been reported at $640-645/mt CFR and some up to $650/mt CFR. The same mill also concluded a deal for a small tonnage at $585/mt FOB, but the buyer’s identity could not be confirmed. At the same time, in Southeast Asia the competition has been strong, so traders have cut offers to $600/mt CFR again. This will put pressure on mills’ prices next week, sources believe.