The mood and price trends for hot rolled coil (HRC) in most regions globally have still been demonstrating pessimism this week as ex-China HRC prices have declined further amid lower futures prices, falling bids, affecting other markets, especially those in Asia. However, import HRC price range has widened in Vietnam amid further slump in China and new ex-Indonesia deal. Meanwhile, ex-India HRC prices have softened slightly as well, given that customers kept pushing for discounts though only buyers in the Middle East have been showing some interest in new purchases, while those in Europe have left the market for long winter holidays.
Chinese HRC export prices have softened further this week mainly under pressure from low domestic and export demand, coupled with another decline in domestic HRC prices in China amid decreasing HRC futures prices. Export offers for boron-added SS400 HRC from large Chinese mills have settled at $475-485/mt FOB, with a midpoint at $480/mt FOB, for February shipment, down by $10/mt week on week. Meanwhile, tradable levels for ex-China SS400/Q235 HRC have been estimated at $470-480/mt FOB, down by $5/mt on the lower end of the range over the past week. At the same time, most buyers are cautious towards purchases during the winter holidays, with only some business reported to have been done with Asian customers and with additional discounts. In particular, while most offers for ex-China Q235 HRC have been voiced at $485/mt CFR, down by $5/mt week on week, at least 10,000 mt of ex-China Q235 HRC is reported to have been sold to Vietnam at $480/mt CFR for late January-early February shipment. Besides, another deal for around 7,000 mt of ex-China Q195 HRC has been signed at $475-476/mt CFR, while Q195 HRC has been voiced at $480/mt CFR. Furthermore, according to sources, a deal for 8,000-10,000 mt of ex-China Q195 HRC has been signed at $490/mt CFR Pakistan this week, while another deal for at least 15,000 mt of ex-China SAE1005 HRC has been reported at $505/mt CFR, down by $15/mt compared to offer prices last week. As of December 27, HRC futures at Shanghai Futures Exchange are standing at RMB 3,400/mt ($473/mt), decreasing by RMB 10/mt ($1.4/mt) since December 20, while down 0.96 percent compared to the previous trading day, December 26.
The SteelOrbis reference price for import SAE1006 HRC in Vietnam has moved to $495-520/mt CFR, versus $500-510/mt CFR last week, with the lower end of the range corresponding to the most competitive offers from China, while the higher end corresponds to the deal price for ex-Indonesia coils reported this week. Specifically, this week most import offers, for ex-China HRC in particular, have continued to move down following the weakening of futures prices in China. Thus, several deals for ex-China coils have been reported at discounted levels in Vietnam, or at around $480/mt CFR for Q235 HRC, though Vietnamese re-rollers have been avoiding ex-China purchases due to antidumping duty-related risks, and some have even agreed to pay higher for ex-Indonesia SAE1006 HRC. In particular, market insiders have reported an ex-Indonesia deal for about 20,000 mt of SAE1006 HRC at $520/mt CFR.
Meanwhile, ex-India HRC prices have been also showing a slight downward bias, moving to $500-535/mt FOB for mainly February-March shipment, down by $5/mt week on week, following continuous pressure from rare buyers. As a result, several discounted sales have been reported for ex-India HRC in the Middle East, while other customers have kept showing minimal interest in new purchases. More specifically, according to sources, following a deal for 25,000 mt of HRC signed at $540/mt CFR UAE last week (or around $510/mt FOB), another trade for 12,000 mt has been reported by an eastern India-based mill for delivery to Bahrain at $535/mt CFR, also net of discount, and corresponds to around $505-510/mt FOB.
In the GCC, trading activity has remained strong, except this time GCC buyers preferred Indian suppliers over China and Japan. According to reports, Emirati and Bahraini buyers recently purchased 25,000 mt and 12,000 mt of HRC from India for $540/mt and $535/mt CFR, respectively. Meanwhile, HRC offers from India to the UAE have been lowered by $10/mt to $540/mt CFR for February shipping, down from $550/mt CFR last week, but some major Indian mills are still attempting to offer the same past levels. Chinese suppliers, on the other hand, have continued to decrease their offers, although no deals have been reached. At the moment, Chinese suppliers have submitted HRC offers to the UAE for February shipment at $515-525/mt CFR, down from $520-525/mt CFR last week. In contrast, Japanese suppliers have not made any fresh offers, although some market participants report that they are still providing the UAE $530/mt CFR at earlier levels.
Turkey’s HRC pricing has been relatively stable in the export and the domestic market over the past week, taking into account that the demand has been becoming slower ahead of the holidays. Mills preferred to maintain their price positions, knowing that the discounts would not trigger any additional sales anyways. As a result, the domestic official prices are still at $560-570/mt ex-works base and slightly above, while $550-555/mt ex-works is considered achievable from some of the mills. Export offers have been reported at $540-550/mt FOB officially, but the market is full of talks about offers and small sales at as low as $520-530/mt FOB. However, overall overseas buyers have been quiet recently, mainly due to holiday period in the EU. Import offers from China have slipped from $505-515/mt to $503-508/mt CFR for Q195 3 mm and up material for February and March shipments. No fresh bookings have been heard so far amid market uncertainties and buyers’ unwillingness to bear big risks.