Global hot rolled coil (HRC) exporters have completed the week with strong optimism, which may result in further rises in their prices in the next round of sales. The main factor is that Chinese HRC exporters have continued to go higher in their prices this week given the rising trends of futures and local HRC prices in China along with the strengthening of the Chinese yuan against the US dollar. Besides, in Asia, most suppliers have kept increasing their offers to all main destinations, while Indian mills have succeeded in new sales at higher levels to the Middle East and Europe. In Turkey, the HRC market has remained relatively positive as well, with Russian suppliers being the most active in terms of sales to the country.
In China, HRC exporters have continued to go higher in their prices this week given the rising trends of futures and local HRC prices along with the strengthening of the Chinese yuan against the US dollar. Export offers for boron-added SS400 HRC given by major Chinese mills are at $560-580/mt FOB, mainly for February shipment, with the midpoint at $570/mt FOB, up by $20/mt week on week. Besides, by the end of the week, several big mills are reported to have increased their offers to $590-600/mt FOB, according to sources. At the same time, the tradable level for ex-China SS400 HRC has increased as well, reaching $550-565/mt FOB, up by $5-15/mt week on week, depending on the destination. Offers for ex-China SS400 HRC to Vietnam have increased to $580/mt CFR, compared to deal prices at $570-575/mt CFR reported at the beginning of the week. Furthermore, by the end of the week several offers for ex-China SS400 have already been heard at as high as $600/mt CFR Vietnam. During the given week, HRC prices in the Chinese domestic market have moved up amid the easing of Covid-19 restrictions in most regions of China. As a result, domestic HRC prices in China are at RMB 3,960-4,110/mt ($569-591/mt) ex-warehouse on December 9, with the average price level RMB 125/mt ($18/mt) higher than that recorded on November 29, according to SteelOrbis’ data.
Indian mills have continued to push up HRC export prices on the back of improved mood riding on sustained higher-volume sales in some destinations, like the Gulf region, and also supported by signs of a revival in sentiments in Asia and the EU. The reference price for ex-India SA1006 2 mm HRC has settled at $535-555/mt FOB, up by $10/mt over the past week. This price level is based on the average price in the latest deals, while new offers have already been voiced at higher levels of $560-570/mt FOB minimum. One of the major Indian mills has managed to sell 30,000 mt of base HRC to the UAE at $580-590/mt CFR, while new offers have already been reported at $600/mt CFR and above. Also, another trade for a lower volume of hardly above 10,000 mt was confirmed with a Bahrain-based buyer at around $600/mt CFR. Indications of improved buying sentiments in the Asian region were revealed in a trade reported by an eastern India-based mill for a limited tonnage to Vietnam at around $535-540/mt FOB. Most new offers from India to Europe are expected at $630-640/mt CFR (hardly below $560-570/mt FOB). The last deal from India to this destination was reported at $545/mt FOB.
The mood in the import HRC segment in Vietnam has continued to improve over the past week, mainly on the rebound in ex-China offers. However, despite the optimism among HRC suppliers, trade has remained muted in Vietnam, still affected by weak demand. The prices available for ex-China SAE1006 HRC have been voiced at as high as $590-600/mt CFR, compared to $570/mt CFR last week. Some rumours about position cargoes for ex-China SAE1006 HRC at $570-575/mt CFR have been circulating in Vietnam, however, this level has been estimated by most market sources as rather “unrealistic” given the bullishness of Chinese suppliers. In particular, by the end of the week, several offers for ex-China SS400 have already been heard at $600/mt CFR Vietnam, up by $10-20/mt since the beginning of the week and compared to $545-550/mt CFR last week. At the same time, other foreign suppliers have been staying out of the Vietnamese market this week, with only offers for ex-Taiwan SAE1006 HRC reported at around $590-600/mt CFR, up by $20-30/mt week on week. The reference price for import SAE1006 HRC in Vietnam has moved to $570-590/mt CFR, compared to $550-570/mt CFR at the end of last week, with the lower end of the range corresponding to Vietnamese customers’ bids and with the higher end corresponding to offers coming from China and Taiwan.
This week, the HRC market in Turkey has remained relatively positive in terms of prices and, in fact, domestic mills have slightly increased their offers. By the end of the week, the level of local offers has settled at $655-675/mt ex-works depending on the mill, marking a $5/mt price rise. Still, the mills admit that nothing much higher than $650/mt ex-works levels works, given the low domestic demand levels and competitive imports. India has been offering at $620/mt CFR minimum, while Chinese traders are at $620-630/mt CFR. No deals have been reported for ex-Asia materials yet, but, according to sources, Russia has recently traded 80,000-90,000 mt of January production HRC in total to Turkey. The price varied from $580/mt CFR for the sanctioned supplier and to $620-630/mt CFR for the non-sanctioned producer.
In fact, Russian mills are about to close January production sales of HRC for export. A non-sanctioned producer is expected to sell its regular 50,000-60,000 mt allocation to Turkey and to finalize the last deals in this round of sales in the coming days. Another HRC supplier has traded over 100,000 mt for export overall over the past two weeks - to Turkey and mainly to the North African region. The estimated FOB prices for ex-Russia HRC sales for January production have varied from $510-530/mt FOB to $570-580/mt FOB depending on the seller.
In Europe, the range of domestic HRC offer prices has remained mainly unchanged, with only slight increases seen in occasional transactions, despite slightly improved sentiments in recent weeks in the region. In particular, domestic prices in the EU HRC market have remained at €610-650/mt ex-works, with official HRC offers from Italian mills standing at €610-650/mt ex-works, the same as last week, though the workable prices have increased by €10/mt to €620-630/mt ex-works over the past week. In northern Europe, prices have averaged at €630/mt ex-works, the same as last week, while transaction prices have remained at €600-620/mt ex-works. However, according to market insiders, most mills in the north are aiming their offers at not below €650/mt ex-works for February deliveries HRC. At the same time, foreign HRC suppliers have continued to test the market with slightly higher offers, though, according to sources, Indian sellers have been the most active. Asian HRC suppliers, like those from Japan, Taiwan, South Korea and Vietnam have increased their offers to €620-630/mt CFR southern Europe, versus €610/mt CFR last week. Furthermore, there were talks about purchases for around 100,000/mt in total of ex-India HRC at $605-610/mt CFR Italy over the past weeks. This week, however, offers for ex-India HRC have been voiced at €610-615/mt CFR, and some at €620/mt CFR.
In the UAE, buyers have remained interested in ex-India imports and have booked another 30,000 mt of HRC at $580-590/mt CFR. Subsequently, offers from India increased to $600-605/mt CFR, which is not of much interest to customers, who have already replenished their stocks to a certain extent. Ex-China offers have risen to $605-615/mt CFR, once again not attractive to customers, at least at the moment.