The price trend in the hot rolled coil (HRC) market globally has been uneven this week as factors affecting the behavior of mills have been different from region to region. In Turkey, local prices have rebounded, providing opportunities for higher import offers. In the EU, local producers increased their offers for CRC and coated steel, signaling somewhat better market conditions for HRC as well. In Asia, on the contrary, Vietnamese suppliers announced a significant drop in their local prices, aiming to attract both domestic and foreign buyers.
- Having returned to the market after the holiday period, CIS-based HRC exporters appeared to be in different positions in terms of sales and the currently available month for production. Russia’s Severstal has closed its February production sales, having sold 60,000-70,000 mt, and has already announced the preliminary offer for March at around $885/mt FOB for big coils. Russian producer NLMK has recently traded 15,000-20,000 mt to Turkey at around $775/mt FOB on average and with these deals it closed its February production sales. Russia’s MMK remains inactive for the second month now, citing limited availability for February. According to sources, MMK is going to carry out maintenance at its rolling lines in February, which, coupled with decent local demand and shipments to regular export buyers, may result in only limited available free allocation. Accordingly, the supplier has started voicing some $800/mt FOB offers for March, while no official offers for February rolling have been heard yet. As for Ukraine, Metinvest has been also taking its time to give official prices for February as part of the allocation is already sold out and the Turkish market has been sending positive signals. The latest deals for small coils were closed at around $760-765/mt FOB, SteelOrbis estimates, while the new offers to be announced next week are expected at higher levels.
- In the EU, local producers have increased prices for HDG and CRC, but have left HRC offers unchanged for now. Still, the move has brought some positive impulse to the overall market mood in Europe, specifically influencing import offers. In fact, Turkish and Indian mills are expected to target higher levels in their sales to the EU, although India has better chances of selling HDG since Turkey is waiting for results of an AD preliminary investigation to be announced.
- In Turkey itself, upward price movement has been seen this week, given that the mills have sold out their February production and have increased both local and export prices. The number of ex-CIS offers has been limited this week as NLMK is sold out, while MMK is evaluating its allocation, and Metinvest is trying to avoid discounts to the level of Indian mills’ prices. According to the latest information, HRC offers from India have been at $775-780/mt CFR, while deals for 20,000-30,000 mt were closed at $765-770/mt CFR for February shipments. In the meantime, domestic mills are back to $830-850/mt ex-works base levels, having sold at $800-815/mt ex-works in the past 10-15 days.
- Vietnamese producers have cut HRC prices to the local and export markets this week, which signals that the downward pressure has not come to an end in the global market. Major Vietnamese steel producer Formosa Ha Tinh has dropped SAE1006 non-skin passed HRC prices to the local market by $70/mt over the past month to $750/mt CFR, while its export offer has been settled at $740/mt FOB.
At the same time, prices from another Vietnamese mill Hoa Phat Group have fallen by up to $60/mt this month to $730-735/mt CFR, mainly due to very weak demand in the local market and the producer’s need to push higher volumes.
Import prices in Vietnam have declined just slightly, by $5/mt over the past week to $745/mt CFR, mainly because Indian suppliers have not released their March shipment offers.
- Indian HRC exporters are still offering competitive prices in reaction to rising mill-end inventories, but they are trying to expand the geographical spread of their destinations, seeing a sharp drop in prices in Vietnam and low interest there as a result. Ex-India HRC prices are in the range of $710-725/mt FOB, down just slightly from $710-730/mt FOB a week ago. The latest deal to Vietnam was at $745/mt CFR, which translates to around $715/mt FOB. At the same time, a contract to North Africa has been done at $780/mt CFR, and given the higher freight to this destination the FOB price equivalent hardly exceeds $720/mt. Negotiations to Turkey and the UAE have been held and at least three bookings have been confirmed at $760-770/mt CFR to both these destinations. Though the local market in India has posted some signs of an increase, they have not been enough to support the export market for now. Indian mills are expected to remain interested in sales for March shipment to foreign buyers.
- Export offers for boron-added SS400 HRC given by major Chinese mills at $770-790/mt FOB for March shipment have remained stable and uncompetitive. The tradable level remains at $760/mt FOB with no interest from buyers. Chinese exporters can keep their export prices high given the firmness of their local market. Domestic HRC prices in China are at RMB 4,845 ($761/mt) ex-warehouse on January 14, up slightly by RMB 25/mt ($4/mt) over the past week, according to SteelOrbis’ data, supported by some rises in futures prices and hopes for restocking ahead of the Chinese New Year holiday.