The general market sentıment in the hot-rolled coil (HRC) market globally has been mainly positive. While in the Mediterranean region the price uptrend has been rather lively and driven by a surge in Turkey, in Asia the situation has been more calm, given the holiday in China. Still, ex-India offers have increased both for Asia and for distant markets, while the expectation for next week is mainly positive.
CIS-based HRC suppliers, especially those selling from the Black Sea/Azov Sea region, have careful, trying not to miss out on the benefits of the rapidly rising market in Turkey. NLMK, according to sources, has been aiming to sell at $940/mt CFR Turkey or around $910-915/mt FOB, while MMK was at $900/mt CFR or around $875/mt FOB early this week. Metinvest, according to sources, has preferred to keep its negotiations quiet, aiming to increase the deal price levels. Some buyers reported that they received offers at $930/mt CFR Turkey or around $900/mt FOB. Severstal, which is based in the Baltic Sea region, has closed its March production sales within $940-960/mt FOB in the most recent deals for small lots, all closed to European buyers.
The Turkish HRC market has continued to rise steadily in terms of prices as mills have been reporting some decent demand from local buyers. The producers have started to give offers for May rolling HRC, claiming they are sold out for April. The new prices have indicated an increase from $880-900/mt ex-works last week to $930-960/mt ex-works in the most recent offers. The number of import offers has been limited to several ex-CIS offers at $930-940/mt CFR and an ex-India price at $900/mt ex-works. Given the rather rapid price rise, some market players have started fearing local mills’ actions could open the gate for more active imports, specifically from Asia. The domestic price of $960/mt ex-works in Turkey may be too attractive to ignore for sellers from India for example, which in this case could quite easily sell at $900-920/mt CFR, sources estimate. Another issue actively discussed in the market this week is the free trade agreement between Turkey and Ukraine, which will result in zero or reduced import tax for a wide range of metallurgical products, originating from Ukraine. No full details have been revealed yet and players are trying to understand how the flats business will be affected.
The European HRC market has also been demonstrating a price increase, but the trend is a more gradual one compared to Turkey. Following the domestic price rise announced by ArcelorMittal last week, workable HRC prices in the EU are now at €940-970/mt in northern Europe and at €830-860/mt in the Italian market, both ex-works and up €30/mt and €20/mt respectively. Still, demand seems to be lagging behind, specifically on the end-user side. Import HRC offers, which have reached €800-840/mt CFR to the southern EU countries are not considered workable for now, giving local mills a bit more space to sell.
The mood among Indian HRC exporters has continued to improve this week. Indian mills have pushed up their HRC export prices by around $30-60/mt given the better mood in the major importing markets and the positive outlook in the local Indian market. A deal to Turkey for ex-India HRC at $870/mt CFR was confirmed last week, while by the end of this week offers to Turkey have already been voiced at $900/mt CFR.
This week, Indian HRC suppliers have also returned to the Emirati market with new offers at $870-875/mt CFR, around $40-45/mt higher than initially expected and at least $85/mt higher than offers in the middle of January. Besides, some Indian HRC offers have also been heard at $900/mt CFR in the UAE this week. However, Emirati customers refused to accept the new offers, waiting for a clearer market situation after the Chinese New Year holiday.
Both Chinese HRC exporters and Vietnamese HRC importers have been out of the market this week due to the holiday. Next week, the market mood is likely to improve and Chinese mills may increase their local and export prices after coming back from their New Year holiday.
