The uptrend in the global hot rolled coil (HRC) market has continued to be strong this week and the major driver has been Asia. Chinese HRC exporters have remained bullish amid good sentiments, encouraging other suppliers to increase prices rapidly. Though demand in the MENA region and Europe has been still slack, offer prices in these outlets have also posted rises.
The increasing trend of HRC futures prices together with the stronger local market have made Chinese HRC exporters even more aggressive in increasing offers this week. Some higher levels have already been accepted by a number of customers, but for only small volumes. Export offers for boron-added SS400 HRC from the major large Chinese mills have reached $590-600/mt FOB, adding another $25/mt week on week. Early in the week there have been some offers at $580-585/mt FOB, but they have disappeared later. The tradable level for ex-China SS400 HRC has also risen - by $20-25/mt over the past week to $580/mt FOB. Small-volumes deals have been reported to Pakistan, South Korea and Vietnam. HRC prices in the Chinese domestic market have indicated strong rises amid the lifting of Covid-19 restriction measures. At the same time, Chinese major steelmaker Baowu Group raised its HRC prices by $28.7/mt for delivery in January, positively affecting the market mood.
Import prices in Vietnam have also posted visible rises, following China’s hike, amid increased supply tightening, which is unlikely to ease in the very short term. Offers for SAE1006 HRC from China have been reported at $610-620/mt CFR at the lowest, with the official offers mainly at the higher end of the range. Bids from Vietnamese customers have increased to $590/mt CFR, being at $570-575/mt CFR at the highest last week. Moreover, the reports about deals from China at $600/mt CFR, heard early this week, have been confirmed by a number of sources. Apart from China, new offers announced only India – at $610-640/mt CFR. The SteelOrbis reference price for imported SAE1006 HRC in Vietnam has moved up to $600-610/mt CFR, up by $25/mt over the past week.
On December 15, major Vietnamese steel producer Formosa Ha Tinh Steel has announced its new local HRC prices for February deliveries with prices up $55/mt from the November levels to $605-610/mt CFR. This increase has fully offset the drop last month and has been supported by the rapid increase in ex-China prices over past weeks, the good export order books of the mills, and some gradual increase in demand in Vietnam.
The second largest HRC producer in Vietnam, Hoa Phat Group, has followed the Formosa’s, announcing its new local prices at $597-600/mt CIF, up by $55-57/mt over the month.
Export prices for HRC from Vietnam have been increasing in tandem with local tags. The latest deal from Vietnam to India has been reported for 20,000-25,000 mt of HRC at $585/mt CFR for January shipment, which is up by $10-15/mt from the previous sales of the same mill to India reported in late November. This level translates to $550/mt FOB. After that a deal at $570/mt FOB was signed to a closer market - Thailand. Moreover, by the end of the week, market sources said that it would be very hard to find an offer at below $590/mt FOB already.
Ex-India HRC prices have been increasing even faster than last week amid some return of interest among buyers and an optimistic outlook on cues of increasing ex-China prices. Ex-India HRC tradable levels over the past week have surged to $555-575/mt FOB, up by $20/mt. But to a number of trade destinations Indian mills have already announced offers at $590-600/mt FOB, expecting buyers to resume purchases at higher prices at some time, having no other options. The latest deal for ex-India SAE1006 HRC to Vietnam was reported at $575-580/mt CFR late last week, which translates to $555-560/mt on FOB basis. The deal is for not less than 20,000 mt of HRC. But after that most mills have withdrawal offers, expecting to come back not below $600/mt CFR or $580/mt FOB. In the UAE, after a number of deals done at $535-545/mt FOB over the past few weeks, a number of large mills have announced offers mainly at $590/mt FOB, which translates to $630/mt CFR.
In the Turkish market, the offer prices for the domestic origin of HRC have increased from $655-675/mt ex-works to $670-700/mt ex-works this week while sentiment has become slightly better due a more positive expectation regarding China. Still, many believe that it will give a temporary boost to the market, urging Turkish buyers to restock, however, the limited end-user demand will remain a problem. A positive impact is seen in the import HRC segment, where the aggressive offers from Russia are gone now and ex-Asia offers have been increasing. Vietnam, Japan and Taiwan are now offering $620-635/mt CFR depending on the seller, China is at $650/mt CFR while India is at as high as $670/mt CFR. In the meantime, Turkey’s HRC exports have remained unbelievable slow, taking into account the non-workable offer prices to the EU. Officially, Turkey is aiming to sell within $650-680/mt FOB depending on the supplier, although some more aggressive offers have been heard, most probably for the HRC, made out of Russian slabs. Turkey’s prices are still not competitive in the EU nowadays, however the market might receive a boost.
According to sources, ArcelorMittal has increased it HRC price across the EU by €50/mt to €680/mt ex-works base. In fact, some of the market players expect the mill might further increase the offer by €20-30/mt next week. Despite the price rise, the workable HRC prices in Europe are still estimated at lower levels - €630-650/mt ex-works, while some believe €620/mt ex-works might be still achievable in Italy. In the import HRC segment of the EU, the prices differ depending on the supplier, but all increased over the week, partly owing to a more positive China. Lowest indications have been reported from Indonesia at €640-645/mt CFR early this week, while later on the offers for Vietnam and Taiwan origins have been heard at €650-660/mt CFR to Italy and €660/mt CFR and above to Spain. India’s material is the most costly at the moment since one of the suppliers is offering at €670-675/mt CFR, sources said.
