The price trend in the hot rolled coil (HRC) market globally has been uneven this week in the absence of Chinese suppliers who left the market for Chinese New Year holiday, as factors affecting the behavior of mills have been different from region to region. While in Europe HRC producers have been making attempts to increase their prices for deliveries in the second quarter given their full orders books and the slight revival in trade activity in the region, local HRC prices in Turkey have been stable in line with the silent trade conditions with the absence of China. In the Gulf region, however, GCC buyers have remained active in importing this week, choosing ex-India HRC.
Bullish sentiment has dominated among HRC producers in northern Europe, driven by the limited availability of both imported material and local HRC amid fully booked orders for March, making mills hesitant to offer significant discounts. Besides, a slight uptick in domestic demand from the automotive sector has further bolstered domestic HRC prices. Thus, HRC offers from mills in the north have been voiced at €620-630/mt ex-works mainly for April delivery, up by €10-20/mt week on week, though, according to sources, some small volumes for March delivery HRC have still been occasionally offered at €590-600/mt ex-works, the same as last week. Meanwhile, business activity in Italy has been slower than in the north of Europe, with offers from Italian mills reported at €600-610/mt ex-works, the same as last week, though, according to sources, “Italian producers have also been targeting higher prices, at around €620/mt ex-works for second quarter deliveries”. At the same time, the tradable HRC prices have been voiced at €580-590/mt ex-works, up by €10/mt week on week. In the import segment, most offers are estimated at €560-590/mt CFR, up by €20/mt on the lower end of the range over the past week.
Ex-India HRC prices have been kept stable by large mills at $485-495/mt FOB and trade activity at lower levels has been kept alive by small-volume deals in the Middle East although at the lower end of the price range. However, most Indian suppliers have been assessing conditions in various destinations, expecting that trade activity may improve slightly and, though pricing will remain a challenge, most suppliers are targeting higher export prices in February supported by the anticipated recovery of local HRC quotes. According to the sources, last week an eastern India-based mill concluded a deal for 5,000 mt for delivery to the UAE against an offer submitted at $490/mt FOB, but the final agreed price was at around $483/mt FOB. Similarly, another large western India-based mill has reported a sale of 8,000 mt for delivery to Qatar at $478/mt FOB, against the initial offer submitted at $485/mt FOB. These deal prices translate to around $510-520/mt CFR, according to sources.
In the GCC, while there has not been much activity in the import market this week due to the holiday in China, there was some interest from Emirati and Qatari purchasers in Indian materials last week. The UAE and Qatar are reported to have purchased 5,000 and 8,000/mt of HRC from India at $483/mt FOB and $478/mt FOB, respectively, equating to $510-515/mt CFR. Even though some larger Indian mills are trying to raise their SAE1006 offers for February-March shipment to $530-535/mt CFR, the majority of offers have been submitted at $510-520/mt CFR to the UAE this week. Chinese suppliers, on the other hand, have been quiet since the Chinese New Year holiday began, with the most recent offers before the break being at $510-520/mt CFR to the UAE. Similarly, Japanese suppliers have remained silent with no new offers submitted, with their previous offers to the UAE being in the range of $500-510/mt CFR.
The Turkish HRC market has been rather slow and quiet this week, mainly owing to the absence of China. While the Chinese suppliers are on holiday, most Turkish buyers have been postponing their purchases in order not to take additional risks, aiming to evaluate the Chinese price situation after the holiday period. Before the holiday, Chinese HRC was largely available at $505-510/mt CFR, while the latest indications have been reported at $520/mt CFR. In the meantime, HRC offers from India and Taiwan for Turkey have been spread at $545-550/mt and $560-565/mt CFR, respectively, both being unworkable under the current market conditions. Russia’s prices have been indicative and reported mainly at $500-510/mt CFR. In the domestic market in Turkey, not much change has been seen, with the realistic price levels standing at $550-565/mt ex-works, although domestic mills are trying to insist on the upper end of the range and slightly higher.
