This week, hot rolled coil (HRC) prices globally have maintained their upward trend, while sentiment in most markets has remained largely positive. Specifically, most Asia-based sellers have become more bullish in talks with their regional and distant market buyers. Furthermore, both in Europe and Turkey import trade has been rather occasional, while more hikes in domestic HRC prices have been reported this week in anticipation of restocking activity in the coming month. Indian suppliers have kept eyeing further prices rises as well even though trade activity has eased slightly.
In Turkey, the HRC market has been quite active this week and mills have managed to increase their workable prices. Still, the uptrend is more of a gradual than a steep one in order not to create more panic in the market. Buyers have been restocking actively, partly as they are already receiving demand from the earthquake-hit region, but also due to the expectation of bigger demand to come soon and the anticipation of further price increases. As a result, by the end of the week domestic HRC prices in Turkey have settled at $850/mt ex-works, up from $820-840/mt ex-works previously and from $800-820/mt ex-works in even earlier deals. Trade has been handled for HRC production in May, but some of the mills are already accepting offers for June. In the import segment, there are offers from China for SAE1006 material at $730-740/mt CFR, versus $700/mt CFR in bids. Overall, Turkish market players expect more import offers soon as domestic prices are high enough to become interesting for Asians, while previously they were focused on more marginal sales to the EU. It is noteworthy there are rumors that Turkey may postpone the imposition of the increased import HRC tax for three or six months, which will loosen up imports to Turkey in the short run.
Most European HRC producers have kept testing the market with further price increases given their low availability as, according to market sources, most European mills have declared themselves fully booked for April deliveries. Thus, official HRC offers from European mills both in Italy and northern Europe have been voiced at €800-820/mt ex-works, up by €20-30/mt over the past week. However, the tradable level both in the south and north of the EU has been estimated at €770-780/mt ex-works, up by €10/mt week on week. Meanwhile, in the import segment, trade activity has remained limited while the price trend has been lacking clarity. Specifically, offers for ex-Asia HRC have been mainly voiced at around €750-765/mt CFR, the same as last week. At the same time, talk about a deal for ex-Japan HRC at €720/mt CFR has been circulating in the market, while offers have been voiced at as high as €760/mt CFR southern Europe. In the meantime, at the beginning of the week, market insiders reported a deal for ex-India HRC at around $805/mt CFR, which translated to around €735-740/mt CFR. Though, by the end of the week, offers for ex-India materials have still been reported at $805-815/mt CFR, on euro basis the prices have increased to around €760-765/mt CFR due to changes in the exchange rate.
Chinese HRC exporters have become more aggressive in increasing offers this week given the rising trend of HRC futures prices in China together with the stronger local market. In particular, export offers for boron-added SS400 HRC from the large Chinese mills have settled at $660-670/mt FOB, for March and April shipments, with the midpoint at $665/mt FOB, up by $5/mt week on week. Besides, according to sources, some mills like Yangang Steel have increased their offers from $665/mt FOB to $680/mt FOB this week. Meanwhile, the tradable level for ex-China SS400 HRC has also risen to $630-650/mt FOB, depending on the destination, from $620-650/mt FOB at the beginning of last week and up by $10-20/mt week on week. Offers for ex-China SS400 HRC have increased to $640-650/mt CFR Vietnam, up by $15-25/mt week on week, while offers to Pakistan have been heard at $670-675/mt CFR, up by $20-25/mt week on week. More interest in Chinese materials has been reported in Turkey, with deals for around 40,000 mt in total of ex-China Q195 HRC reported to have been done at $670-690/mt CFR through a trader. However, by the end of the week most offers have been reported at above $700/mt CFR in Turkey. Meanwhile, domestic HRC prices in China are at RMB 4,230-4,350/mt ($609-627/mt) ex-warehouse on February 23, with the average price level RMB 90/mt ($13/mt) higher than that recorded on February 16, according to SteelOrbis’ data.
In Vietnam, this week, the price range for imported SAE1006 from different sources has been at $670-730/mt CFR Vietnam, according to reports from market sources. In particular, the lower end of the range corresponds to deal prices at $670-675/mt CFR for 20,000-25,000 mt of ex-China SAE1006 HRC reported at the beginning of the week, up by $5-10/mt week on week. Meanwhile, although most Vietnamese buyers’ bids have still been heard at $670/mt CFR levels, most offers for ex-China materials have been reported at above $680/mt CFR, while one of the major Chinese mills Baosteel has announced its offer in Vietnam at as high as $723/mt CFR. Meanwhile, ex-Japan SAE1006 HRC has settled at $730/mt CFR for April shipment, up by around $30/mt over the past week. Besides, the indicative prices for ex-India SAE1006 HRC have been estimated at $720/mt CFR and above. The SteelOrbis reference price for import SAE1006 HRC has moved to $670-680/mt CFR, compared to $670/mt CFR last week given the bullishness mounting among all foreign suppliers.
Ex-India HRC trade activity has eased slightly, but suppliers have remained bullish. The reference price for ex-India HRC is standing at $680-740/mt FOB depending on the sales destination, and so the average tradable level has added $5/mt over the past week to $710/mt FOB. A number of offers below $700/mt FOB were withdrawn over the past week as suppliers have not been ready to actively accept lower levels, even though sentiments have eased. Though the number of deals reported over the past week has fallen, local mills have remained optimistic based on the fact that producers in some importing countries have been increasing ex-work prices and expectations that the current easing of prices will be short-lived.
