Rising trade tensions, sparked by Trump’s weekend announcement of a 25 percent tariff on all US steel and aluminium imports, weighed on hot rolled coil (HRC) prices, especially in Asian region. However, potential declines were cushioned by uncertainty over the seasonal demand rebound and persistent stimulus expectations ahead of China’s Two Sessions, the country’s largest annual political gathering, anticipated in March. In terms of prices, although ex-China HRC prices have been mostly stable from mills, tradable prices have fallen amid futures declines, affecting other markets globally. Thus, this week Vietnam’s Formosa decided to cut HRC offers for local buyers emphasizing still weak mood for imports and exports. Ex-India HRC export activity has been muted in line with relatively stable offers, while local Indian HRC trade prices firmed up slightly as mills hiked base prices. At the same time, while trade activity in the Gulf region has been slow as well, with Emirati buyers delaying new HRC bookings amid declining trend of import offers, some revival both import and export activity has been seen in Turkish HRC market this week. In Europe, HRC mills have kept targeting more hikes for the second quarter, but import challenges have persisted.
In China, most big HRC mills have rolled over their export prices, while, according to sources, most of them have returned from the holiday but are still avoiding placing firm orders due to the shaky situation amid the imposition of new tariffs in the US, while in the local Chinese HRC market, prices have seen decreases compared to the previous week amid declining HRC futures prices. Specifically, export offers for boron-added SS400 HRC given by major Chinese mills are at $470-480/mt FOB for mainly March shipment, the same as last week. Meanwhile, traders have been more active, though with lower offers, as sentiments have worsened among market players this week. As a result, the tradable level has decreased by around $7.5/mt as compared to traders’ offers last week to $458-465/mt FOB. Offers for ex-China Q2345 HRC in Vietnam have been estimated at around $470/mt CFR, down by $5-10/mt week on week. However, by the end of the week, most bids have moved to $460/mt CFR level. Meanwhile, domestic HRC prices in China have settled at RMB 3,430-3,530/mt ($471-484/mt) ex-warehouse on February 14, with the average price level RMB 55/mt ($7.5/mt) lower compared to that recorded on February 7, according to SteelOrbis’ data.
In Vietnam, this week local Vietnamese producer Formosa Ha Tinh Steel (FHS) announced its new HRC prices for domestic customers, decreasing them by around $17-23/mt month on month to $495-503/mt CFR Vietnam ports. The new offers have been revised downwards, as expected by most market insiders, given the new drops in prices for import HRC, for ex-China HRC in particular, while most customers have been pushing for lower bids given the slow demand in the country. In the meantime, offers for ex-China Q235 HRC in Vietnam have been estimated at around $470/mt CFR, down by $5-10/mt week on week, though most bids have been voiced at as low as $460/mt CFR by the end of the week. Offers for ex-China SAE1006 HRC have been estimated at $487-490/mt CFR for March shipment, down by $3-5/mt week on week. Besides, offers for ex-Indonesia HRC have been voiced at $505/mt CFR, though rumors about discounted ex-Indonesia offers at $485/mt CFR have been circulating in the Vietnamese market this week. Moreover, according to sources, offers for ex-Malaysia SAE1006 HRC have been reported at $480/mt CFR, while suppliers from Japan have been offering their materials at $490-495/mt CFR. Thus, by the end of the week, the SteelOrbis reference price for import SAE1006 HRC has moved to $480-490/mt CFR, compared to $487-490/mt CFR at the beginning of the week and down by $5-10/mt week on week.
Ex-India HRC prices have been kept largely stable in the past week at $485-495/mt FOB, however, at least two mills are heard to have submitted offers higher at $505-510/mt FOB, taking hope from reports of improvements in the price trend in Europe and the demand recovery in the Middle East region, but still no deals at higher levels have been confirmed during the past week as competition with other Asian suppliers remains tough. Thus, the SteelOrbis reference price for ex-India SAE1006 HRC has settled at $485-510/mt FOB, against $485-508/mt FOB last week. Offers for ex-India HRC have been estimated at $525/mt CFR UAE, against deal prices at $530/mt CFR two weeks ago, though, according to one source, “Mills are more flexible now on export prices given the competition with other suppliers from Japan, China and Vietnam, and we expect $515/mt CFR might be the deal price level”.
In Turkey, the business activity in both import and export segments has been seen recently. Particularly, 20,000-30,000 mt were booked from Egypt at $535-540/mt CFR along with around 35,000 mt from a non-sanctioned Russian mill at $515/mt CFR. Ex-China offers have been firmer this week at $490-495/mt CFR which is $5-10/mt lower than right after the holidays. A rumor is there about one cargo booked from China by a Turkish re-roller with no details disclosed yet. On exports, the workable HRC price levels from Turkey have improved from $520-525/mt FOB to $530-540/mt FOB in the most recent sales to Europe for overall decent volumes for April shipments. Based on livelier exports and also citing a firmer scrap, Turkish mills have been trying to pull up the domestic HRC offers to $555-560/mt ex-works base, but the reality is still closer to $545-550/mt ex-works.
In the UAE, although Chinese suppliers reduced HRC offerings, other suppliers stayed constant and monitored the market, but diminishing movement is predicted on their end as well in the coming days. As a result of the volatile price swings and decreased expectations, Emirati purchasers have postponed purchases and are closely monitoring market trends. According to sources, Chinese suppliers have reduced their March SS400 offers to $490-495/mt CFR, down from $510-520/mt CFR last week. However, Japanese suppliers that sold some quantities in prior weeks have maintained offers identical to the previous week, at $510-515/mt CFR for July shipment. Similar stability has been seen among Indian suppliers, currently SAE1006 offers around $525-530/mt CFR for shipping at the end of March.
In Europe the HRC segment has shown signs of improved buying activity, particularly in the northern region, compared to the notably low levels observed throughout January. Meanwhile, although in Italy there has been no significant rebound in bookings or shipments compared to January figures, steel mills have been aiming for higher prices for April deliveries as well. In the import segment, business activity remains significantly affected by trade measures, though talk about deals for low-priced HRC has been circulating in the market this week. More specifically, European mills in northern Europe have been offering HRC at €620-640/mt ex-works for deliveries in the second quarter, up by €10/mt on the higher end of the range week on week, while the tradable prices have been estimated at €600/mt ex-works, the same as last week. In Italy, HRC offers from mills have been voiced at around €600-620/mt ex-works, the same as last week, though, according to sources, some mills have been pushing their offers for April delivery at €630/mt ex-works. Meanwhile, the tradable prices have been assessed at €585-600/mt ex-works, against €580-600/mt ex-works last week. As for imports, the price range has been widening this week, reaching €530-590/mt CFR, against €560-590/mt CFR last week, given rumors about new deals for ex-Indonesia and ex-Malaysia HRC signed at $550/mt CFR southern Europe, which translates to around €530/mt CFR, though no official confirmation has been provided by the time of publication. At the same time, most offers for ex-Turkey HRC have been estimated at €590-600/mt CFR, including duty, the same as last week, however, talk about a deal for ex-Turkey HRC signed at €575/mt CFR last week, duty paid, has been circulating in the market this week.