Hot-rolled coil (HRC) prices have shown a clear downward trend globally in the last week of April. Buyers in most regions, including Turkey, Europe and Asia, have preferred to wait and see, being quite sure mills’ prices are set to decrease further. Indeed, suppliers have decreased their offer prices this week and more discounts are foreseen after the holiday period, specifically in Turkey, China and MENA countries.
The Turkish flat steel market has seen a significant price decrease during the pre-holiday week due to low demand, slow exports, high stocks and the generally pessimistic mood among the buyers. The domestic HRC prices have dropped from $1,180-1,230/mt ex-works to $1,150/mt ex-works over the week, but offers are not solid. Some mills announced the mentioned levels as their official prices, but some prefer to wait until after the holiday. Some sources report the levels of $1,100/mt ex-works being also achievable, but HRC pricing in Turkey is expected to settle in a week from now. Generally, the expectation is downward as the Turkish HRC pricing is mainly considered to be inflated. In addition, the local prices in the related markets, particularly the EU, have been decreasing, which has a negative impact on ex-Turkey workable prices.
In Europe, domestic workable prices decreased to €1,230-1,250/mt in the southern region, down by around €20/mt over the week. However, on Friday some sources reported there are deals at €1,210-1,220/mt ex-works in Italy. Buyers continue to wait with large orders, partly due to the holiday period, but also taking into account they have enough stocks at least for now and have time to see if there will be another price decrease. Still, the production costs in the EU remain high, and so some of the sources believe the expected discounts may not be huge, but will just bring the market prices to relatively healthy levels. In the meantime, import HRC offers from Asia to the southern EU have decreased by €30-50/mt over the week to €1,030-1,050/mt CFR levels. Several buyers from Spain reported there have been offers from India at as low as €980-1,000/mt CFR with no deals. Sources explain that India may be the most aggressive supplier, taking into account slow sales in the alternative destinations and the limited quota availability in the EU.
Russian mills have been inactive in terms of HRC sales this week, following a total of 70,000-80,000 mt sales to Turkey at up to $1,000/mt CFR. The new negotiations are expected to be handled at much lower levels, given the steep downturn seen in the Turkish market. In any case, serious talks are expected to be renewed after the holiday, when prices will settle somewhat. Locally, the prices for hot-rolled sheets in Russia are at around $950-960/mt (RUB 81,000-81,500/mt) CPT and this level is considered more attractive for now as compared to the workable export prices, especially given the ongoing difficulties with the overseas sales.
In the meantime, Russia has been actively selling slabs to China and the total tonnage in at least eight deals has hit or even exceeded 300,000 mt. The deals were closed in a wide range of $673-700/mt CFR depending on the supplier and the time when the deal was done. Russian mills are expected to continue concentrating on slab exports to Asia, but the prices are to trend down, given the recent developments in the Chinese market.
In Vietnam, prices for import HRC have moved down this week as a number of Chinese sellers have been offered cargoes at much lower levels. This decrease is mainly due to the decline in domestic HRC prices in China, affected by the poor downstream situation caused by the Covid-19 lockdown in Shanghai. In particular, at the beginning of the week, the prices available for ex-China position SAE1006 HRC were as low as $872-875/mt CFR, compared to the latest deal price at $905/mt CFR last week. Besides, by the end of this week, several offers have been already voiced at $850/mt CFR. Furthermore, cheap position cargoes from China for lower quality coils and strips have been reported to Vietnam. Offers for ex-China SS400 HRC have been voiced at $820/mt CFR for late June shipment, compared to $855-860/mt CFR last week. There was a booking for ex-China narrow strip 2.5 mm at $815/mt CFR and another deal for Q125 coils at $805/mt CFR. By the end of the week, Vietnamese importers reported several new offers for ex-China SS400 HRC coming at $800/mt CFR. As a result, the SteelOrbis’ reference price for import SAE1006 HRC in Vietnam, based mainly on the most competitive offers, has come to $850-875/mt CFR on April 29, compared to $872-890/mt CFR at the beginning of the week, and down by $20-23/mt from $895-910/mt CFR a week ago.
In China, bearish sentiments have prevailed among Chinese suppliers as the country has been struggling in the fight against the rapid spread of the Omicron variant, and so the lockdown in Shanghai has continued, negatively affecting the whole country, with more high-speed roads being shut down, resulting in difficulties in circulation of goods. Export offers for boron-added SS400 HRC given by major Chinese mills are at $810-840/mt FOB for June shipment, with the average price $55/mt lower compared to last week. Besides, the lowest offer prices of ex-China HRC came from Hebei Province-based Chinese steelmaker Anfeng Iron and Steel, which have been heard at $790/mt FOB. At the same time, the tradable price level for ex-China SS400 HRC has been heard at $770-830/mt FOB, depending on the destination, down by $50-55/mt over the past week. In particular, at the beginning of this week, ex-China SS400 HRC offers to Vietnam had fallen to 820/mt CFR, compared to $855-860/mt CFR last week, while by the end of this week new offers from Chinese traders have already been reported at $800/mt CFR Vietnam. Ex-China SS400 HRC offers to Pakistan dropped to $830/mt CFR, versus $875-885/mt last week. Domestic HRC prices in China are at RMB 4,990-5,090/mt ($757-772/mt) ex-warehouse on April 29, with the average price level RMB 195/mt ($30/mt) lower as compared to April 19, according to SteelOrbis’ data.
Indian HRC exporters have remained under strong pressure from rising inventories and sluggish local sales. Ex-India HRC prices have settled at $910-980/mt FOB, with the lower end of the range declining by $10/mt and corresponding to the latest trades to the UAE, while the higher end of the range has slipped by $70/mt week on week after the sharp fall in offers to Europe. Trading has become elusive with only stray deals heard in the Gulf region, while European customers are also cautious in the falling market. Though early this week the indicative price level for ex-India HRC to Europe was still at $1,050/mt FOB or around $1,150/mt CFR, by the end of the week lower and lower offers have started to emerge, at $980-1,000/mt FOB.
