Japanese HRC exporters have remained bullish since February, increasing prices further even despite falling prices for ex-China HRC and lower tradable levels in Asia as a result. The allocation of HRC from Japan has remained limited, while overall demand for thin coils has stayed high, and so exporters have focused on supply to higher-priced markets like the EU.
Offers of ex-Japan SAE1006 HRC to Asian customers reached $980-1,100/mt CFR in mid-March, up by $80-150/mt over the past month. Limited sales to Pakistan have been confirmed at $980-990/mt CFR. Besides, after signing a deal for around 10,000 mt of HRC to Bangladesh at $1,000/mt CFR last week, a new deal has been reported at $1,065/mt CFR Bangladesh this week. Meanwhile, Vietnamese customers said no offers are coming from Japan and most buyers have been focusing on purchases of cheap cargoes from China at around $905/mt CFR.
Furthermore, no offers for ex-Japan coils have been heard in the Middle East for almost one month. “I haven't heard for a long time any HRC offers from Japanese to the Middle East, probably since January when AGIS purchased a cargo for March shipment. Japanese traders in the Middle East say that, after they received the US quota, the chance to sell to the region at a lower price ex-Japan is very slim,” an international trader told SteelOrbis.
In the meantime, Europe has remained among the most attractive destinations for Japanese HRC exporters. The latest deals for ex-Japan HRC have been heard in Europe at €1,200/mt CFR or $1,325/mt CFR, compared to $1,000/mt CFR one month ago. “Japan is mainly focused on sales to the EU, but even there the allocations are limited and the competition with India is very tough,” a Japanese trader stated.
“Currently, we need to keep our eyes on the future situation in India, which enjoys a lot of selling at high prices to Europe amid bullish sentiment. We don’t think that prices have already reached a peak,” a market source said.
