The general price sentiment in the global market of hot-rolled coils (HRC) has been quite negative this week, taking into account slower demand in many regions and mainly pessimistic expectations on the raw materials side, particularly scrap. While some markets like Turkey are taking their time to drop the HRC workable prices till after the Ramadan holiday, the prices in Europe have continued falling. In Asia, the prices have also been dropping, specifically in large sales from China to Vietnam.
The exporters from Russia have been trying to trade their HRC volumes this week and some of them succeeded in sales, despite the applied international sanctions. In the import segment of Turkey, additional ex-Russia cargoes have been booked at around $1,000/mt CFR and the total purchased volume for the Russian origin of HRC to Turkey since the past week is now at around 70,000-80,000 mt, SteelOrbis estimates. The FOB price is estimated at around $940-950/mt, sources say. Still, a lot of market players find it hard to believe that the mentioned price level was accepted in Turkey since the risks are high and there are lower or same prices in the market from the alternative, “safer” suppliers. Along with the Turkish market, the Russian suppliers have been offering HRC to Vietnam, but at much lower levels – around $750/mt CFR, SteelOrbis has heard.
Despite that the official HRC prices in Turkey have remained relatively stable this week at around $1,200-1,250/mt ex-works for July deliveries, the downward expectation has strengthened among the domestic buyers. The reason is the slow end-user demand for the coated steel and pipe products and the price decline, seen in the import HRC segment. According to sources, HRC buyers in Turkey realize that the mills have not been selling for a while now and expect them to come to the market with rather aggressive pricing. Some customers believe $1,180/mt ex-works levels are possible today, although no confirmed bookings have been reported at this level. Offers from India have been heard at quite aggressive levels of around $1,010-1,030/mt CFR, but some sources believe the traders might be shorting the market. On exports, the demand for ex-Turkey HRC has remained extremely slow this week since the offers are not competitive.
Both local and import HRC prices in the EU, which is the key sales destination for the Turkish mills, have decreased over the week. One of the reasons is the weaker demand from the end-user side and slower business activity during the Easter holidays. Another reason is that the flats stocks are at the optimum levels and buyers are not in a rush to purchase. As a result, the domestic workable HRC prices in the EU dropped by €20-30/mt to €1,250-1,360/mt ex-works. In the meantime, the import offers from Asia have been settled at €1,065-1,100/mt CFR, according to the latest information, while the deal from India was reported at €1,050/mt CFR. Overall, the import HRC prices from Asian sellers decreased by around €50/mt over the week. Offers from Turkey and Egypt are at around €1,190/mt CFR and €1,165/mt CFR, respectively, and are not considered workable by the local customers.
Both local and import HRC prices in the EU, which is the key sales destination for the Turkish mills, have decreased over the week. One of the reasons is the weaker demand from the end-user side and slower business activity during the Easter holidays. Another reason is that the flats stocks are at the optimum levels and buyers are not in a rush to purchase. As a result, the domestic workable HRC prices in the EU dropped by €20-30/mt to €1,250-1,360/mt ex-works. In the meantime, the import offers from Asia have been settled at €1,065-1,100/mt CFR, according to the latest information, while the deal from India was reported at €1,050/mt CFR. Overall, the import HRC prices from Asian sellers decreased by around €50/mt over the week. Offers from Turkey and Egypt are at around €1,190/mt CFR and €1,165/mt CFR, respectively, and are not considered workable by the local customers.
In Vietnam, the situation in the HRC import market has continued to be bearish this week. The SteelOrbis’ reference price for import SAE1006 HRC has moved to $895-910/mt CFR, compared to $900-925/mt CFR last week, considering the recent deal signed with a Chinese supplier at $905/mt CFR and the continuous drop in position offers coming from China at $895-905/mt CFR. Besides, new position offers from Chinese traders for SS400 coils have been voiced at $855-860/mt CFR, down by $5/mt week on week. Meanwhile, other foreign suppliers like those from India, Japan and Taiwan have continued to stay out of the Vietnamese market, though market participants reported an indicative offer for Russian HRC at $750/mt CFR Vietnam, but no deal has been reported so far due to payment and delivery issues.
Meanwhile, after an increase of $20/mt announced by Vietnamese steelmaker Formosa Ha Tinh Steel in its HRC prices last week, another local Vietnamese mill Hoa Phat Group has also raised its prices. The new prices for SAE1006 and SS400 HRC for shipment in June have been settled at $920-925/mt CIF, up by $15/mt on average over the past month.
Indian HRC exporters have continued to decrease prices for their main sales destinations, the Middle East and Europe, this week. Meanwhile, most buyers have been resisting higher prices, reducing imports unless sellers agreed to significant discounts. Besides, the slowdown in domestic sales put additional pressure on Indian HRC suppliers. Thus, ex-India HRC prices dropped further to $930-1,050/mt FOB early this week, down from levels of $950-1,100/mt FOB late last week. However, by the end of the week, market insiders reported levels even lower than $930/mt FOB, considering the new deals done in the UAE. In particular, after an Indian mill confirmed a booking to the UAE at $1,000/mt CFR, which translates to $940/mt FOB or below, a new deal for ex-India HRC has been signed at $980-990/mt CFR UAE. Meanwhile, the Easter holidays in Europe kept the market silent for most of the previous week, while market insiders have since reported a deal for ex-India coils to southern Europe at $1,150/mt CFR, which translates to $1,050/mt FOB. In addition, in Europe new lower price levels are being discussed too, and so the highest prices from India are expected to stand at $1,000/mt FOB soon. The SteelOrbis’ reference price for ex-India HRC has been settled at $920-1,050/mt FOB.
In China, export offers for boron-added SS400 HRC given by major Chinese mills have dropped to $860-900/mt FOB for June shipment, with a midpoint at $880/mt FOB, with the average price $5/mt lower compared to last week. At the same time, the tradable price level for SS400 coils, including the level from traders, offering in short positions, has fallen to $825-880/mt FOB. In particular, several contracts for ex-China SS400 HRC are reported to have been signed with Vietnamese buyers at $855-870/mt CFR this week, down by $10/mt on the lower end of the range over the past week. Meanwhile, demand in the higher-priced destinations has slowed down, and so Chinese HRC suppliers have decided to decrease their prices to attract buyers. In particular, at the beginning of the week ex-China offers dropped by $20/mt on the higher end of the range week on week, though by the end of the week ex-China offers have settled at $940-960/mt CFR UAE. Domestic HRC prices in China have increased by RMB 10-30/mt ($2-5/mt) over the past week to RMB 5,190-5,280/mt ($805-819/mt) ex-warehouse on April 22.
