The situation in the global hot rolled coil (HRC) market has started to change slightly by the end of this week, mainly due to the better sentiments which have appeared in China following increases in futures prices after weeks of a strong downtrend. However, despite the turbulence in China, Indian HRC suppliers have decreased their prices in new deals to Vietnam and the Middle East. In Europe, however, both local and import HRC prices have continued to move down this week. As for buyers in Turkey, most of them have been inactive this week, becoming more cautions regarding the future trend.
The decreasing trend of ex-China HRC prices has been showing some signs of a slowdown as some rebounds have been seen in HRC futures prices, though as of Tuesday, May 30, ex-China HRC quotes from mills have decreased again to $540-565/mt FOB, for July shipment, with a midpoint at $552.5/mt FOB, losing $7.5/mt over the past week following a new drop in futures prices. However, by the end of the week, export offers for boron-added SS400 HRC from major Chinese mills have been voiced at $550-565/mt FOB, though, according to sources, most mills have revoked their offers, expecting a clearer situation next week. At the same time, traders in China have decided to increase their offers, so the tradable level for ex-China SS400 HRC has been heard at $535-545/mt FOB, versus $520-535/mt FOB at the beginning of this week. Only a few offers for ex-China SS400 HRC in Vietnam have remained at $530/mt CFR, while most exporters have increased their offers to $545-555/mt CFR Vietnam by the end of this week.
Although at the beginning of the week prices of imported HRC in Vietnam had remained mainly unchanged from China while other suppliers were even lowering their offers for Vietnamese buyers, by the end of the week the situation has started to change. In particular, following increases in iron ore and HRC futures prices in China, Chinese SS400 HRC offers from most suppliers have by the end of the week increased by $15-25/mt to $545-555/mt CFR. Meanwhile, offers for ex-China SAE1006 have been rare in Vietnam, with only a few offers reported at around $575-585/mt CFR, compared to $560-570/mt CFR at the beginning of the week. At the same time, according to sources, Vietnamese customers have managed to purchase several big batches for ex-Taiwan and ex-India HRC at $568-570/mt CFR level, anticipating price rebounds after the recovery of Chinese futures prices. Thus, the SteelOrbis reference price for imported SAE1006 HRC in Vietnam has settled at $570-590/mt CFR, up by $10/mt since the beginning of the week, and versus $560-590/mt CFR last week.
Ex-India hot rolled coil (HRC) prices have continued to be lowered by mills, but still most suppliers have been struggling to secure new deals given the continuous pressure from lower bids from buyers. However, after at the beginning of this week exporting mills have dropped their HRC prices by an average of $15/mt to the range of $565-600/mt FOB, by the end of the week ex-India HRC prices have dropped to $550-600/mt FOB, with the lower end of the range corresponding to deal prices in Vietnam, while deals to other destinations, including the Middle East and Singapore, have been reported at $565-570/mt FOB this week.
In Europe, HRC offers from European mills have been heard at €680-750/mt ex-works, versus €700-770/mt ex-works last week, with the lower end of the range corresponding to offers from Italian mills at €680-700/mt ex-works, down by around €40/mt week on week, while the tradable level has been assessed at as low as €650/mt ex-works in Italy. At the same time, while occasional offers have been heard from northern European mills at €760/mt ex-works for September deliveries, the tradable price level has been estimated at €720-750/mt ex-works, down by €10-30/mt over the past week. The expected stabilization of import HRC prices has once again failed to materialize this week, with more offers heard at lower levels. In particular, offers to southern Europe have settled at €580-625/mt CFR, down by €10-15/mt week on week, depending on the origin and destination, with offers from Vietnam and Indonesia at the lowest level among all suppliers at €580/mt CFR Italy, down by €10-20/mt week on week. Meanwhile, suppliers from Japan have decreased their prices for HRC to $630-640/mt CFR Italy, which translates to €588-607/mt CFR, versus €610-640/mt CFR last week. Offers for ex-India HRC have been voiced at €600-625/mt CFR, the same as last week, though, according to sources, by the end of the week only offers at $670/mt CFR or €625/mt CFR have remained in the market, while producers who offered at €600/mt CFR have decided to halt their offers. Besides, offers from Egypt have been heard at $640/mt CFR or around €600/mt CFR, down by €25/mt over the past week.
The HRC market in Turkey has been rather silent this week and prices have remained relatively stable. A lot of market players have been aiming to evaluate China’s moves, but also to see the situation with the local currency and payments after the second round of the presidential election. However, there were no aggressive moves from China and during most of the week its indicative offers for HRC varied at $570-575/mt CFR for 3 mm and higher, Q195 grade, in line with last week. In fact, some market players assumed $560-565/mt CFR levels are also possible for 20,000-30,000 mt orders, but no deals have been reported. Moreover, by the end of the week, according to traders, some of the large Chinese mills have pulled back their offers given the ongoing turbulence in the local and futures markets. In this situation, and taking also into account the dull demand, local HRC producers in Turkey have maintained their price levels at $660-670/mt ex-works, though levels $10-15/mt lower are also considered possible. Some sources believe that a potential price increase from China may support the pricing in Turkey and that mills could avoid further discounts. However, the situation as regards exports has remained challenging due to the ongoing price decline in Europe and softening import HRC offers from Asia to the EU.
In the UAE, opposing opinions have continued to be seen among Emirati HRC importers due to the weak end-user demand and slower business activities, even though purchasers have continued to buy some modest lots in order to replenish supplies. According to market speculations, certain Indian traders have sold some smaller amounts to the UAE for $605/mt CFR, while Indian mills have chosen to maintain the previous week's offers of $625-630/mt CFR for June-July shipment. In contrast to Indian mills' offers, Chinese mills have experienced a modest reduction in their offer prices by $5/mt to $605-610/mt CFR to UAE for June-July shipment. Meanwhile, Chinese traders with the lowest offers in the market this week have opted to stick with their previous offers of $570-575/mt CFR for June-July shipment. In addition, ex-Japan offers have decreased from $620-630/mt CFR to $610/mt CFR to the UAE over the past few weeks.