The reduced allocation for the export market and improved sentiment in the Asian market in June provided support for ex-Japan HRC prices. Suppliers have managed to increase deal prices for September shipment compared to August shipment: however, the recent deals have been done at levels below the initial offers.
About 40,000-50,000 mt of Japanese SAE1006 HRC were traded to Vietnam at $450/mt CFR for September shipment last week. A big cargo for August shipment was traded at $435/mt CFR Vietnam, as SteelOrbis reported a month ago. Initially, Japanese suppliers were targeting $460-470/mt CFR for September in the Vietnamese market, but had to give some discounts to attract customers.
In other Southeast Asian countries, offers have been heard not lower than $460/mt CFR over the past two weeks, but some deals were registered at $445-450/mt CFR Indonesia in mid-June.
Offers from Japan to Pakistan have been heard at $460/mt CFR, with some tonnage trading at below this level in the second half of June.
Overall demand in Asia picked up for September shipment imported coils, but in some other sales destinations like the GCC, for example, sentiment has not been very good. Last week, a contract for Japanese HRC was signed at $440/mt CFR, down from the offered level of $450/mt CFR for September shipment.
As a result, according to a number of sources, export prices for Japanese HRC increased by $10/mt on average compared to the previous month's shipment material to $420-425/mt FOB. Some movement of $5/mt up and down from this price range was possible depending on the sales destination. “Production reduction and lower allocation from mills pushed prices up,” a Japanese trader said.
For October shipment, the sales outlook is unclear. Some sources believe that Japanese sellers will have more chances. Some said that it is still very early to predict, moreover, seeing some slowdown in demand in Asia over the past week.