Global View on HRC: All main suppliers keep maintaining prices high, market evaluations remain optimistic

Friday, 22 December 2023 17:28:02 (GMT+3)   |   Istanbul
       

Most global hot rolled coil (HRC) suppliers have kept their offers relatively stable this week, while the HRC market globally has remained positive rather than negative, despite slow business activity in most markets following decent purchases done earlier this month and the approaching end of the year holidays. However, offers from Chinese traders have continued to fluctuate this week following ups and downs in futures HRC prices, putting most buyers especially in Asia under continuous pressure.

Chinese HRC mills mostly kept export offers stable this week at $580-590/mt FOB for boron-added SS400 HRC. At the same time, at the beginning of the week, given the decline in HRC futures prices some Chinese traders decided to make concessions, providing small discounts. However, by the end of the week, futures prices have recovered once again, affecting Chinese sellers’ mood, with the tradable prices for ex-China SS400 HRC estimated at $565-575/mt FOB, against $560-570/mt FOB at the beginning of the week and rolling back to last week level. Meanwhile, domestic HRC prices have been showing ups and downs as well this week, reaching finally RMB 4,070-4,280/mt ($571-600/mt) ex-warehouse on December 21, mainly the same as last week, according to SteelOrbis’ data.

Following a slight recovery seen in Vietnam’s HRC import market last week, this week has brought firstly a drop and then again, some hike in prices amid fluctuations in China. At the beginning of the week, several ex-China SAE1006 HRC offers were reported at $585-590/mt CFR for mid-February shipment, against $590/mt CFR at the end of last week, while by Thursday, Vietnamese customers have estimated ex-China SAE1006 HRC offers at $590-595/mt CFR. Meanwhile, given the recovery in Chinese HRC futures, by the end of the week. offers for ex-China Q195 and SS400 HRC in Vietnam have shown some rises as well, reaching $570-575/mt CFR for Q195 HRC and around $580/mt CFR for SS400 HRC, respectively, up by $5-10/mt since the beginning of the week.

Ex-India HRC prices have been maintained at $620-660/mt FOB, the same as last week, with the lower end of the range has remained rather indicative, in Asia and the Middle East in particular, with no deals reported at this level, while the higher end of the range corresponds to ex-India offers in Europe. According to sources, ex-India HRC prices have been quoted in the range of $700-720/mt CFR or $650-670/mt FOB, but only small-volume deals were concluded at the lower end of the range as distributors in Europe were unwilling to make large commitments ahead of the holidays.

In Europe, although the workable HRC prices have remained relatively stable, with only a slight increase reported this week, bullishness persisted in the region as the key local producer ArcelorMittal has decided to push its domestic prices across the EU up by around €30/mt. Official offers from other European mills have been still estimated at €700-725/mt ex-works, both in Italy and northern Europe. The tradable level is currently at €680-695/mt ex-works, against €670-695/mt ex-works last week, with the lower end of range corresponding to offers in Italy at €680-690/mt ex-works, while the higher end of range corresponds to northern Europe price idea at €685-695/mt ex-works, for February-March deliveries. In the import segment, however, ex-Asia offers have continued to grow, reaching €650-660/mt CFR for March shipment, versus €640-650/mt CFR last week, though most of the suppliers have been stepping back from the active HRC offering in the EU.

Turkey’s HRC market has remained relatively stable this week, given the absence of movement in the import scrap segment and pretty much unmoved import flats offers. Local HRC in Turkey has remained at $700-720/mt ex-works with some deals closed below $700/mt ex-works. However, generally the market has been quiet ahead of the holiday period. Import offers from China have been at $605-615/mt CFR for January-February shipments this week, following deals for up to 100,000 mt, closed earlier in the same price range. Although generally a price retreat for HRC is expected in Turkey, some sources believe that if the situation in Suez Canal is aggravated, flats prices might receive a boost since shipments from China would be sort of jeopardized. For now, the freights from Asia increased by $5-7/mt, which makes buying from the destination less attractive. In addition, according to sources, a vessel carrying ex-Korea flats cargo to Turkey’s Gemlik has been hijacked near Somali. The cargo was at least 30,000 mt and belonging to Samsung, while some sources refer to over 40,000 mt. Such a development will create a short-term shortage in Turkish markets, but also is to result in certain further risks as regards to future shipments.

In the UAE, while domestic demand has been solid, trade activity on the import side has remained silent this week. Even though HRC offers, particularly those from China, have begun to decline, Emirati purchasers who have restocked before have chosen to hold out and assess the situation. In contrast to the Chinese pricing trend, ex-India and South Korea continue to make extremely high offers, and according to sources, it is nearly impossible to catch the attention of Emirati buyers at this price level. As a result, this week's ex-China offers for SS400 grade have dropped by $10/mt to $590-620/mt CFR for January shipping to the UAE. However, according to sources, SAE1006 grade HRC offers have risen to $630-640/mt CFR from $610-620/mt CFR previously. Meanwhile, Indian and South Korean suppliers, who are attempting to offer much higher levels, offered $650-660/mt CFR and $695-700/mt CFR, respectively.


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