The general market sentiment in the global hot rolled coil (HRC) market has remained mainly negative this week. While in the Mediterranean region prices have remained under pressure from low demand, with lower domestic offers reported by Turkish and European suppliers, in Asia the situation has been quiet, given the Chinese New Year celebrations. At the same time, only Indian suppliers have managed to sell sizeable volumes in the Middle East at a relatively stable price level this week, though they were forced to decrease their offers to Europe due to the bearishness mounting in the local EU market and tougher competition with Asian suppliers, like those from Vietnam.
This week, European producers have as expected, decreased their HRC offers given the extremely slow buying activity in the region as most customers have been refraining from new purchases amid high levels of stocks, while prices for import materials have been on the wane. More specifically, offers from European HRC producers have decreased significantly this week, moving to €730-760/mt ex-works levels, against €745-780/mt ex-works last week, with offers in northern Europe HRC heard at €740-760/mt ex-works, while prices from Italian mills have settled at €730-740/mt ex-works for April delivery. In the import segment, most offers for mainly ex-Asia origin have been voiced at €630-660/mt CFR, down by €10-20/mt week on week. At the same time, although trade activity has been rather slow in Asia amid the Chinese New Year celebrations, market insiders have reported new deals for ex-Vietnam and ex-Japan HRC signed in Spain at €630-635/mt CFR. Meanwhile, most ex-Asia HRC offers have been estimated at €640-650/mt CFR southern Europe, down by €10/mt week on week, including new offers from India at $695/mt CFR, translating to around €647-650/mt CFR. Indicative offers from Turkish suppliers have remained at the highest level among all exporters, at $690/mt FOB, which translates to around €700-715/mt CFR, depending on the supplier, according to sources.
Ex-India hot rolled coil (HRC) prices have continued to vary widely across geographies, standing at $580-650/mt FOB, versus $585-680/mt FOB last week, while actual trade has remained mainly muted as sentiments among most buyers have become bearish especially given that the EU market is falling silent. However, more deals have still been reported in the Middle East at $600-605/mt FOB level given the better demand in the region coupled with less competition with Chinese sellers amid the Chinese New Year holiday. According to sources, with China remaining out of most markets, it is difficult to estimate how the current trend will move going forward. However, even in the midst of uncertainty, most Indian sellers expect the Middle East to provide some support at least in booking volumes, although sellers would continue to face pricing challenges.
Turkey’s HRC market has been silent this week given the absence of offers from the main foreign supplier, China. In the meantime, the price expectations for flats are currently mixed. Some players expect the prices to soften overall given the rather pessimistic expectations in the scrap segment, the weakening market in Europe, and financial issues domestically. As a result, Turkish mills have decreased their offers to local and foreign customers slightly in order to spur some sales. However, since they are not under pressure to sell for April production, no drastic price drops are anticipated. This week, domestic HRC offers have softened by around $5/mt to $700-720/mt ex-works and $690/mt ex-works levels are said to be available as well. As for exports, HRC prices are at $690-700/mt FOB in offers, but levels at $680-685/mt FOB are said to be available for larger lots. In the import segment, the indications from China have remained at $600/mt CFR on average for Q195 material of 3 mm and higher, while some expect prices will go down after the Chinese holiday.
In the UAE, as China withdrew HRC offers due to its holiday, Emirati customers seeking to restock maintained their preference for Indian suppliers. Even though South Korean suppliers are present in the market, the majority of Emirati buyers do not favor their material owing to the high offer prices in question. As a consequence, UAE-based and Saudi Arabian purchasers bought a total of 70,000 mt of HRC from India last week at $630-635/mt CFR, while the latest offers remain stable week on week at roughly $635-645/mt CFR. On the other hand, South Korean suppliers with greater price expectations are attempting to offer at approximately $670/mt CFR, comparable to the previous week’s levels.