Following a rather sharp recovery in prices last month, in November the uptrend of HRC prices has reversed globally and Japan HRC exporters have been forced to provide discounts to most foreign customers given the bearish sentiments appearing overseas, triggered by the price fall in China. Besides, pressure has not only been coming from Asia, but also from higher-priced markets like the Middle East, while customers from the EU have kept refraining from bookings.
Specifically, offers for ex-Japan SAE1006 HRC for the Asian region have settled at $520-535/mt CFR, down by $10-15/mt month on month. According to sources, Japanese HRC suppliers have continued to struggle to attract the attention of Vietnamese buyers, with only occasional deals reported during the past month and only with additional discounts. Specifically, while indicative prices for ex-Japan SAE1006 HRC have been voiced at $530/mt CFR Vietnam, a deal for around 20,000 mt has been signed at $520/mt CFR, according to sources. Meanwhile, following offers for ex-Japan SAE1006 HRC at $540/mt CFR in Pakistan in late October, this week SteelOrbis has learned of a fresh booking for 30,000 mt of Japanese SAE 1006 HRC at $524/mt CFR for January shipment. Besides, another Japanese mill has sold 30,000 mt in total to two other Pakistani customers at $530/mt CFR through trades.
In Bangladesh, meanwhile, one of the Japanese mills has been offering at $535/mt CFR, though, according to sources, “the workable price should not exceed $520/mt CFR.” “Re-rollers are aiming for lower prices. Meanwhile, other suppliers like those from China and even South Korea are offering much lower levels at around $520/mt CFR Bangladesh,” a Japanese trader told SteelOrbis.
In the meantime, Japanese suppliers have been offering their coils at around $530/mt CFR to the Middle East, down by $20/mt over the past month. According to sources, business activity has been rather limited in the region given the tight competition with Chinese sellers. However, several deals for around 30,000 mt of ex-Japan HRC are reported to have been done at $530/mt CFR UAE last week.
At the same time, Japanese suppliers are still focusing on the European market, though they have been facing extremely low interest in new purchases due to the competitive local prices in the region, coupled with safeguard duty risks which most buyers are unwilling to accept. In late November, indicative offers for ex-Japan HRC have been heard at €580/mt CFR southern Europe, against €575-580/mt CFR in late October.
