The situation in the global hot rolled coil (HRC) market has started to change slightly this week mainly amid the worse sentiments which have appeared in Asia following the fall in futures prices in China after weeks of a strong uptrend. However, despite some turbulence in China, Indian HRC suppliers have continued to push their prices up, succeeding in concluding sales to different destinations. Similar to Indian suppliers, European HRC mills have increased their offers before leaving the market for the long Christmas-New Year holidays. In Turkey, HRC prices have remained mainly firm despite weaker end-user demand.
Indian mills have increased their HRC export offers further, far above $600/mt FOB, riding on the back of a demand revival from major markets like the Gulf, Asia and moderately from the EU region and the higher levels have already been accepted by a number of customers. Ex-India HRC prices have reached $575-605/mt FOB in the last transactions, with the midpoint at $590/mt FOB, up by $25/mt over the past week. Indian mills have started to resubmit offers at higher levels of $600-650/mt FOB by the end of the week. An eastern India-based mill concluded a deal for 25,000 mt for February shipment to the UAE at $580/mt FOB around a week or ten days ago. The same mill also reported a trade with a Singapore-based trading firm, speculated to be for forward trading to Vietnam, for 30,000 mt at around $575/mt FOB, which corresponds to around $595-600/mt CFR, with new offers not below $620/mt CFR. A Gujarat-based trading mill, through its Europe-based trading arm, concluded a deal for 20,000 mt for delivery to Italy at $585/mt FOB last week, trade sources said. This level translates to around $635-640/mt CFR. But the new deal price for ex-India HRC to southern Europe has been heard at $660/mt CFR this week and by the end of the week offers have come up to $670-700/mt CFR.
In China, sentiments among Chinese traders have worsened this week following the sharp drops in futures and local prices in China, though most big Chinese mills have decided to roll over their export prices. In particular, export offers for born-added SS400 HRC given by major Chinese mills are at $590-600/mt FOB, the same as last week, while a few big producers have continued to maintain their offers at even $605-610/mt FOB. Besides, small mills have kept offering at around $580/mt FOB. Meanwhile, the tradable level for ex-China SS400 HRC has settled at $570-580/mt FOB, the same as at the beginning of last week, but down by $10/mt compared to the end of last week. Domestic HRC prices in China are at RMB 4,010-4,110/mt ($574-588/mt) ex-warehouse on December 23, with the average price level RMB 100/mt ($14/mt) lower than that recorded on December 16, according to SteelOrbis’ data.
In Vietnam, following significant increases in HRC import offers seen last week, this week signs of falling prices have emerged in Vietnam from Chinese traders, given the worse mood in China’s futures and domestic markets. In particular, ex-China SS400 HRC offers have dropped to $580-585/mt CFR, from $585-600/mt CFR offered last week. This price drop is explained by the decrease in ex-China HRC future prices. Meanwhile, market insiders have reported only price drops in ex-China SS400 HRC prices so far, while offers for SAE1006 HRC have remained at $610-620/mt CFR. At the same time, the lowest offers from other foreign suppliers, like those from India and Taiwan, have been voiced at $610/mt CFR Vietnam. As a result, the reference price for import SAE1006 HRC in Vietnam has remained at $600-610/mt CFR, given the lack of firm offers at lower levels so far despite the negative mood appearing in China.
HRC prices remain rather firm in Turkey, though demand has been weakening ahead of the holidays and due to low end-user demand. However, coated steel offers have risen this week, though the workable domestic price levels have remained at lower levels. Domestic HRC prices in Turkey are now at $670-690/mt ex-works, $10/mt higher on the upper end over the past week. One of the mills, however, is said to be offering at $700-710/mt ex-works, although these levels are certainly not workable. In the import segment, a 20,000 mt cargo ex-India was rumoured in the market as having been sold at $638/mt CFR, and new offers are at least at $660/mt CFR. China is currently offering at $630-640/mt CFR, up by $10/mt over the past week, while Vietnam has increased its offer by $15-20/mt over the past week to $640/mt CFR. Russian HRC is available at $600-620/mt CFR and $640/mt CFR depending on the producer.
European producers have continued to push for higher HRC offers following the €50/mt increase by the leading regional producer last week. At the same time, the tradable price level has also increased in new deals across the region, though by the end of the week business activity has been close to zero ahead of the holidays. In particular, workable prices in the EU HRC market have increased to €650-680/mt ex-works, versus €630-650/mt ex-works last week. More specifically, official offers from Italian mills have been voiced at €650-680/mt ex-works, up by €20-30/mt week on week, while the tradable level has been estimated at not below €650/mt ex-works level. In northern Europe, although some occasional contracts have still been heard at around €630/mt ex-works, most of the new deals have been reported at €650-670/mt ex-works. Meanwhile, import HRC offers in southern Europe have been relatively stable over the past week, with most offers at €640-665/mt CFR, depending on the origin. However, according to market insiders, trade has been muted this week, given that most buyers have left the market for the holidays and expect to come back after January 9.
Emirati clients are not eager to make purchases right now, and they are watching the market as import offers for HRC improve in response to rising demand and orders. Meanwhile, demand in the UAE is also still below the targeted levels, and projects are still not beginning. Ex-India HRC offers to the UAE have been heard at $610-620/mt CFR, but also one Indian supplier has offered at $640/mt CFR for January shipment. Ex-China SS400 HRC prices have settled at $630-640/mt CFR. Meanwhile, South Korea is offering HRC at $620-640/mt CFR for February shipments.
