Although many global hot rolled coil (HRC) producers have tried to stabilize their prices at least for domestic customers, the situation in the export market has continued to be rather pessimistic this week given the uncertainty mounting over Chinese HRC prices affected by the fluctuations in HRC futures prices, while demand has remained week in almost all regions globally. More specifically, the price trend has been lacking clarity in China since, while on the one hand domestic consumption has remained a serious issue affecting prices, on the other hand market participants have been expecting some recovery amid the anticipated production cuts announced by the government. The situation in other outlets has been lacking clarity as well, with domestic prices for HRC in Turkey having stabilized somewhat, while in Europe, despite another drop in local prices, this week has brought some changes to the HRC market as many suppliers have started to claim that domestic HRC prices will hit the bottom very soon.
Chinese HRC exporters, including both mills and traders, have remained rather negative in terms of prices this week given the continuous fluctuations in futures prices, which first increased at the beginning of the week and then again dropped by the end of the week, while demand has remained sluggish in the main trade destinations. Specifically, by Friday, April 5, export offers for boron-added SS400 HRC from most large Chinese mills have settled at $510-545/mt FOB, compared to $520-545/mt FOB at the beginning of the week and $17.5/mt on average week on week. As for the tradable level for ex-China SS400, it has settled at $500-520/mt FOB by the end of the week, against $510-525/mt FOB heard earlier this week, given another drop in Chinese HRC futures prices.
In Vietnam, import HRC prices mainly originating from China have continued to fluctuate this week following ups and downs in HRC futures prices in China. More specifically, after Chinese traders increased their export offers to Vietnamese buyers at the start of the week by $8-10/mt to $518-522/mt CFR levels for Q235/SS400 HRC, by the end of the week most offers have settled at $515-520/mt CFR. Import offers for SAE1006 HRC, however, have remained rare in Vietnam, with the SteelOrbis refence price rolling back to last week’s level at $555/mt CFR, from $555-560/mt CFR at the beginning of the week, based on ex-China indicative offers. At the same time, this week Vietnamese producer Hoa Phat Group has announced its new local HRC offers for non-skin passed SAE1006 and SS400, decreasing them by around $40/mt month on month to VND 13,710-13,740/kg ($548-550/mt) CIF.
The ex-India HRC trade has remained in limbo amid negligible demand in the main trade destinations, while export offers have been lowered by an average of $20/mt by local mills to the range of $545-570/mt FOB. Buyers from Europe were absent owing to the Easter holidays over the weekend, while ex-India HRC offers to southern Europe have been reported at around $625-630/mt CFR, which translates to around $570-575/mt FOB, down by around $20/mt week on week. Besides, most ex-India HRC offers in the Middle East have been estimated at $600/mt CFR, against $600-610/mt CFR last week.
In Europe, local HRC prices have decreased once again this week, falling to €650-690/mt ex-works from mills, against €650-700/mt ex-works last week. Offers from Italian mills have been estimated at €650-660/mt ex-works, down by €10/mt on the higher end of the range week on week, while mills in the north have been offering their HRC at €670-690/mt ex-works, against €680-700/mt ex-works last week. Meanwhile, the tradable prices have settled at €640-660/mt ex-works, with the slower end of the range corresponding to offers in Italy and with the higher end of the range corresponding to offers in the north. According to sources, despite another price drop, this week has brought some changes to the European HRC market as many suppliers have started to claim that domestic HRC prices have already reached the bottom or “will rock it very soon”. At the same time, trade activity has been slow in the import segment this week due to the uncertainty over potential safeguard duties for the third quarter, while the second quarter allocations have been filled in just the first few days of the new quota period. Import HRC prices in southern Europe have been estimated at around €560-610/mt CFR, mainly the same as last week. However, according to several European customers, Asian suppliers are no longer willing to reduce prices.
Domestic prices for HRC in Turkey stabilized somewhat this week despite the fluctuations of ex-China offers and the general uncertainty related to the local elections. However, the end of the week and considering the upcoming holiday, the lowest local HRC offers at $620/mt ex-works, available previously, seem to have been taken off the table for now. The latest workable levels are $630-635/mt ex-works base, while some offers are back to $640-650/mt ex-works and above. As for exports, offers have slid by $15/mt to $605-615/mt FOB, mainly under pressure from low business activity and the price downturn in Asia. In the import segment, China started the week with a price drop by $10/mt to $540-550/mt CFR, but later its prices rebounded to $550-565/m CFR due to the rise in steel futures prices. No deal has been reported for Chinese origin after at least 120,000-130,000 mt was transacted earlier at $553-565/mt CFR, as SteelOrbis reported previously.
In the UAE, domestic end-user demand for flats has remained weak, so, even despite a downturn in ex-China import offers, Emirati buyers have been postponing their purchases. While the majority of SS400 offers from Chinese suppliers fell by $10-15/mt this week to $540-555/mt CFR for May shipment, first-tier Chinese mills have been quoted in the UAE at about $570-580/mt CFR. Indian suppliers, on the other hand, have offered at $600-610/mt CFR for May shipment, which is the same as last week. Additionally, South Korean suppliers have maintained offers at $640/mt CFR for May shipment, whereas Japanese suppliers have not made any offers to the UAE this week.