Prices for ex-Japan HRC have increased by the end of February, and this has been confirmed in the latest bookings done in the Southeast Asian market and to other destinations like Turkey. Availability from the major Japanese mills has worsened even more, being one of the main reasons for the price hike.
Prices for ex-Japan SAE1006 HRC of 2 mm maximum have returned to $800-810/mt CFR and above in deals to different sales destinations - in Southeast Asia, Turkey and Europe - in late February. These sales have been for April shipment coils. “This week, the market improved a lot. Cheaper markets like Vietnam and the GCC were all skipped,” a Japanese trader said.
The main reason for the improvement has been the bullish HRC market in China and the more aggressive policy of Chinese exporters. In such conditions, and taking into account the worsening of the supply situation in Japan prices have been strongly supported. Some sources said that Nippon Steel is aiming for $800-850/mt CFR in Asia. “We are yet to receive any firm offer for Q2,” another market source said.
“Now, mills are saying there is no allocation for new customers for the second quarter for all types of steel goods. They are cutting big volumes even for regular customers,” a source said, adding that this is due to very strong demand in Japan, as well as tighter supply due to periodical maintenance scheduled for the April-June period.
The latest contracts for Asian suppliers, excluding Vietnam, have been heard at $800/mt CFR and slightly higher, which corresponds to $770-775/mt FOB. The volumes have been limited.
Also, the latest booking to Turkey has been reported at $810/mt CFR this week, which is equivalent to $770/mt FOB or slightly below. The tradable level to Europe has reached $830/mt CFR for Japanese coils.
As SteelOrbis reported earlier, late last month the deal price level for ex-Japan HRC was as low as $750/mt CFR in Asia and only the level in the EU was at above $800/mt CFR.
“We see less allocation for April onward at this moment, though we have received lots of inquiries from our customers. Overall, we are now in a situation of excess demand with less supply,” a source from Japan said.
