The situation in the global hot rolled coil (HRC) market has not changed much this week, with European and Turkish suppliers increasing their prices for domestic customers mainly due to rises seen in energy costs. In this context, stronger local HRC prices in Europe and Turkey have triggered an uptrend in the import segment. Meanwhile, the situation in Asia and India is different. Although big Chinese mills have decided to go slightly higher, the tradable level has remained mainly unchanged or has even dropped in some contracts. Similar to Chinese suppliers, major Indian mills have been either offering higher prices or have been out of the market, though some sellers have been forced to decrease prices in order to push volumes overseas.
In Europe, most HRC producers have continued to test the market with further price increases given their high production costs due to rises seen in energy costs. In particular, HRC offers from European mills have been evaluated at €780-850/mt ex-works, up by €20-30/mt week on week. More specifically, prices around €780-800/mt ex-works are now more common in the Italian market, compared to €760-780/mt ex-works last week, while prices of €800-850/mt ex-works are seen in northern Europe, up by €20-30/mt week on week. Besides, some mills have already started to announce output cuts to balance the market. In this context, HRC import prices have been increasing as well, with European buyers purchasing only limited volumes, and, according to market insiders, some customers have even faced the cancellation of contracts. Import HRC offers, including those from Japan, Egypt, Taiwan and Turkey, have been reported at €720-740/mt CFR southern Europe, compared to €680-710/mt CFR last week. Furthermore, market insiders have reported several deals done in Italy and Spain for ex-Japan HRC at €660-670/mt CFR at the beginning of the week. However, new offers have increased to €730-740/mt CFR levels.
In Turkey, HRC prices have settled at $680-710/mt ex-works base, up $10-30/mt since the end of last week. The upward move made by mills is certainly cost-driven, though overall flats demand has picked up somewhat over the week. Buyers have started to purchase materials, especially coated and cold rolled materials, fearing that prices will go further up and also being in need to replenish their low stocks. As a result, CRC prices in Turkey have reached $800-820/mt ex-works, although some re-rollers may still sell at $760-780/mt ex-works. Local HDG offers are at $800-850/mt ex-works base, while PPGI offers have been reported at $930-960/mt ex-works.
In the import segment in Turkey, ex-Russia offers have been the most attractive. According to sources, one Russian mill traded limited volumes at $620-625/mt CFR and up to $630-640/mt CFR, while another started selling at $600/mt CFR and managed to increase the workable price to $615-620/mt CFR. As a result, Russian mills have succeeded in raising their sales prices by around $30-35/mt over the past month to $560-580/mt FOB for HRC. Stronger prices in Turkey’ and the positive movement in the European market have helped the Russians take advantage of the situation. However, another factor is that all three Russian flats producers will each have at least a week of maintenance works at their hot rolling lines in October. As a result, the general market allocation will be limited, while also taking into account the lively local market in Russia, which has been consuming high levels of tonnages.
Some Indian HRC exporters have been forced to cut prices, trying to push volumes abroad. Ex-India HRC prices have been reported in the range of $570-585/mt FOB, with the higher end of the range down by $10/mt and representing possible levels to Vietnam, while the lower end of the range has lost $5/mt from last week, with at least one deal to Europe and the rumour of a deal to the GCC at this level. Even though prices have slipped slightly over the past week, most suppliers believe there will be a rebound in the near future due to the reduction in supply in Europe and other markets.
The tradable level for ex-China SS400 HRC has remained mainly unchanged or has even dropped in some contracts over the past week, while some big Chinese mills have decided to go slightly higher. In particular, export offers for boron-added SS400 HRC given by major Chinese mills are at $590-600/mt FOB for October and November shipments, with a midpoint at $595/mt FOB, up by $2.5/mt week on week. However, according to market insiders, official offers from big mills and their deal prices differ a lot. Thus, the tradable level for ex-China SS400 HRC has settled at $552-575/mt FOB, down by $3-5/mt week on week, depending on the destination. In particular, Chinese traders have signed several deals with Vietnamese customers at $570/mt CFR, while most offers have been reported at $570-580/mt CFR, compared to $585/mt CFR at the beginning of last week. Domestic HRC prices in China are at RMB 3,910-4,050/mt ($565-585/mt) ex-warehouse on September 9, with the average price level the same as compared to September 2, but RMB 45/mt ($6.5/mt) higher compared to yesterday, according to SteelOrbis’ data.
In Vietnam, the price trend has been unclear this week, while Vietnamese customers have continued to show very limited interest in HRC imports considering the still weak demand and high levels of stocks. Following a deal for around 20,000 mt of an ex-Taiwan mixed cargo, including SS400 HRC and SAE1006 HRC, signed at $590-610/mt CFR at the end of last week, this week the prices available for ex-Taiwan SAE1006 HRC have been reported at $600-610/mt CFR. At the same time, the indicative prices for ex-Japan SAE1006 HRC and ex-India boron-added coils have remained at $600/mt CFR, the same as last week. At the same time, offers for ex-China SAE1006 HRC have remained extremely limited in Vietnam this week, with the indicative level standing at around $600-610/mt CFR, down by $5-10/mt week on week. However, several deals for ex-China SS400 HRC have been signed at $570-575/mt CFR Vietnam this week. Market participants are seeking a clearer price direction and are expecting local HRC producer Formosa Ha Tinh Steel to announce new prices next week.
The SteelOrbis’ reference price for import SAE1006 HRC in Vietnam has settled at $590-600/mt CFR Vietnam, compared to $590-595/mt CFR last week.