The global HRC market has remained under strong negative pressure as sellers have been struggling to push volumes, while demand in most major outlets has remained slack. Prices in Europe have continued to fall rapidly with more aggressive import offers putting pressure on local suppliers. Sentiment has also been very cautious in Turkey ahead of the elections on Sunday. But the Asia HRC market has witnessed a rebound this week following the rises seen in Chinese futures prices early this week and the resulting higher offers from traders. But for now, market sources are still cautious and are not sure if the recent movements will continue as demand is still weak and overall sentiments in China are not so good with mills still bearish.
This week started with some rather unusual movement in the Chinese HRC market, with steel mills still dropping their export offers despite some rebounds seen in local and futures prices, while Chinese traders, on the other hand, have decided to maintain their prices or even raise them. Export offers for boron-added SS400 HRC given by major Chinese mills have settled at $565-605/mt FOB, with the midpoint at $575/mt FOB, down by $25/mt compared to offers last week. But the tradable level for ex-China SS400 HRC has settled at $550-580/mt FOB, versus $530-570/mt FOB last week, with the lower end of the range corresponding to offers in Vietnam at $560-570/mt CFR, up by around $20/mt week on week, which have already been fixed in a few deals. At the same time, several deals for ex-China HRC have been reported in India at $620/mt CFR. Offers for ex-China material have been reported in Turkey at $595-600/mt CFR, versus $580-585/mt CFR last week. Buyers in the Middle East have also reported some ex-China SS400 HRC offers at $630/mt CFR, up by $10-20/mt week on week.
Although sentiments have remained largely negative in Vietnam’s HRC import market given no visible signs of a demand recovery in the country, some rebound has been seen in import prices from Chinese suppliers. Offers for ex-China SS400 HRC from traders have increased to $565-570/mt CFR for end-of-June shipment, compared to $540-550/mt CFR last week. This price rebound is mainly explained by better sentiments in China given the recent announcement of production cuts and the recovery in HRC futures prices. Meanwhile, most offers for ex-China SAE1006 HRC have been reported at $615-620/mt CFR mainly for July shipment, up by $5/mt over the past week. At the same time, hardly any offers have been heard from other foreign suppliers, with only some heard from a Japanese producer at $650/mt CFR for July shipment.
In Pakistan, after ex-China SAE1006 HRC offers were reported through traders at $565/mt CFR last week, this week new offers have been voiced at around $585-590/mt CFR, while offers from big Chinese mills have already been voiced at as high as $640/mt CFR. Besides, offers for ex-China SS400 HRC have been heard at $570/mt CFR, up by $10-20/mt week on week. Some market participants expect a further rebound, while some still do not believe in a strong uptrend and are expecting prices to roll back in the coming weeks. Meanwhile, this week suppliers from Taiwan have been offering their SAE1006 HRC at $625/mt CFR, while offers from Japan have been voiced at $630/mt CFR, up by $10-20/mt over the past week.
Ex-India HRC prices have dropped sharply this week in the face of strong ex-China and other ex-Asia competition. A few deals which were labelled “compulsion sales” have been reported in the market at much lower levels. Ex-India HRC prices have settled at $605-650/mt FOB by the end of the week with the midpoint at $627.5/mt FOB, compared to $645-690/mt FOB late last week, with some deals already done at the lower end of the range to the Middle East. In total, around 10,000-15,000 mt of ex-India SAE1006 HRC have been traded at around $605-610/mt FOB, translating to about $640/mt CFR UAE. The higher end of the export price range still corresponds to offers to Europe, which have fallen by up to $40/mt over the past week.
In Europe, domestic HRC prices in the major markets have remained under pressure from competitive import offers, particularly those from Asia. In fact, import offers have fallen by €15-20/mt over the past week to €640-685/mt CFR in the southern part of the EU. The lower end is for the offers from Indonesia, Vietnam and Taiwan. In the Antwerp area, offers have been voiced at €670-685/mt CFR, down from €700-720/mt CFR last week. In this situation, workable domestic HRC prices in the EU have dropped by €50/mt to €750-800/mt ex-works in Italy, although official offers are at €800-820/mt ex-works. In the northern region, the offers have been estimated at €840/mt ex-works.
The Turkish HRC market has been experiencing rather contrasting price trends in the domestic and import segments. On the one hand, ex-China offers for June shipments have rebounded over the past week from $580-595/mt CFR to $605-615/mt CFR. This has brought some optimism to the market, especially coupled with some evaluations that scrap prices have bottomed out, at least for now. The other foreign HRC suppliers have been offering at $620/mt CFR (Indonesia) and $640/mt CFR (South Korea). No significant interest has been seen from Turkish buyers since most restocking has been delayed until after the election on May 14 in order to avoid risks. For this reason, the cautious optimism in China and the scrap market situation have not helped Turkish mills to maintain their domestic HRC prices. The workable levels have dropped by $20/mt over the past week to $700-720/mt ex-works base, while official offers have been standing at $720-735/mt ex-works. As regards exports, offers have been reported at $680-690/mt FOB and even lower, while some suppliers have been resisting going below $700/mt FOB.
In UAE, Emirati purchasers continue to purchase some lots in order to refill supplies. As a result, Indian mills sold around 10,000-15,000 mt of SAE1006 HRC at $605-610/mt FOB for June shipment which is translating to around $640/mt CFR UAE. While according to last week’s report, ex-Indian offers are down by $35-40/mt CFR from $675-680/mt CFR. Also, UAE has booked 30,000 mt of HRC from Japan at $630/mt CFR down from previous offers by $55-60/mt. Contrarily ex-China offers who were aggressive in the last couple of weeks’ offers, this week due to some increments in local and future prices most of the offers have increased by $30/mt to $630/mt CFR. Furthermore, South Korea has opted to maintain last week's pricing range of $670-680/mt CFR for June and August shipments.
