The overall market situation for hot rolled coil (HRC) globally has changed slightly over the past week, since China has become less aggressive in the export markets and has even increased its prices. However, most market insiders emphasize that this happened only due to the rebound in futures prices in China, while demand in the rest of the Asian region has remained at low levels so far. Meanwhile, Chinese sellers have succeeded in selling sizable volumes of HRC to Turkey as more and more buyers there have become certain that the bottom has been reached. In Europe, however, both local and import HRC prices have continued to move down, with more talk about the necessity of production cuts to stop price declines circulating in the market.
As expected, following a decline in ex-China HRC prices at the beginning of this week, prices hit the bottom, and since Tuesday, March 19, prices have started to show some signs of a recovery given the recent rally in HRC futures prices and local HRC prices in China. Thus, by Friday, March 22, offers from small mills and traders have increased to $525-540/mt FOB, against $515-525/mt FOB at the beginning of the week, though export offers for boron-added SS400 HRC from big Chinese mills are still assessed at $535-550/mt FOB. At the same time, Chinese suppliers have been active in terms of new sales to Turkey, with at least 90,000 mt in total of ex-China Q195/SS400 HRC reported to have been sold at $553-554/mt CFR in the first round and at $555-556/mt CFR in the second round, while new offers have reached around $565-570/mt CFR or around $530-540/mt FOB by the end of the week.
In Vietnam, while at the beginning of the week local producer Formosa Ha Tinh announced another decrease in local HRC prices by a moderate $10-11/mt, import prices for ex-China SAE1006 HRC in particular firstly dropped to $555-560/mt CFR, but then rolled back to last week’s level at $560-565/mt CFR by the end of the week given the improved sentiments in the domestic market in China, coupled with the recent rally in HRC futures prices. Meanwhile, ex-China SS400 HRC offers in Vietnam have been voiced at $535/mt CFR, up by $5-10/mt since the beginning of this week, while offers for Q195 HRC have increased by $15/mt since Tuesday, March 19, to $530/mt CFR Vietnam.
Ex-India HRC prices have remined relatively stable during the past week, standing at $570-595/mt FOB, with the higher end of the range down by $5/mt over the past week. At the same time, although some Indian mills have been more active in negotiations to the Middle East, there have been no confirmed deals so far, while most offers to the UAE from traders are still ranging at $600-620/mt CFR, which translates to $570-590/mt FOB. Most offers for ex-India HRC in Europe have been heard at €610/mt CFR, though some occasional offers have been voiced at €590/mt CFR, which is equivalent to $590-595/mt FOB, while most sources emphasize the extremely low import activity in the EU, as most buyers want to see on April 1 how much HRC will be custom-cleared and there will be more clarity on the duty rates needed to be paid.
HRC prices in Turkey have moved in opposite directions this week since Chinese offers have increased, following a few sales, while domestic workable prices have moved down under pressure from buyers. Particularly, China has sold at least 90,000 mt of HRC in total within around $553-556/mt CFR for at sight payment depending on the buyer. Another deal at $560/mt CFR including some extras has been heard in the market but has not been confirmed by the time of publication. Following these sales, Chinese suppliers have increased their offers and have finished the week at $570-575/mt CFR indications for Q195 of 3 mm and up higher. In the domestic market in Turkey, 10,000-15,000 mt deals have been closed this week at $640-650/mt ex-works base, down from last week’s levels of $650-670/mt ex-works. Most of the material is on offer for May deliveries.
In the UAE, since the local market is still sluggish during Ramadan, trade activity has slowed considerably. In the meantime, HRC offers are still falling due to weaker ex-China offers, causing Emirati purchasers to wait and see for imports. As a result, Chinese suppliers' offers this week have been reduced to $550-570/mt CFR from $560-570/mt CFR, for April shipment. India, on the other hand, has kept offers at $600-620/mt CFR UAE, although prices are higher and less appealing than those of other exporters. Similarly, this week's offers from Japan are unchanged week on week $620-630/mt CFR.
Business activity in the European HRC market has remained weak this week with most EU buyers aiming for lower prices from mills, amid slow demand, still high stock levels, and the continuous pressure from falling import prices. More specifically, the general range in the EU HRC market has moved to €640-710/mt ex-works for April-May delivery, versus €670-720/mt ex-works last week. Offers from Italian mills have decreased to €650-670/mt ex-works, down by €10-30/mt week on week, while the tradable level estimated by buyers has been voiced at €640-650/mt ex-works. Meanwhile, in northern Europe, most customers have reported the tradable levels at €670-690/mt ex-works, versus €690/mt ex-works last week, while offers from mills stand at €700-710/mt ex-works, down by €10/mt on the higher end of the range week on week. In the meantime, interest in imports has remained limited due to the safeguard quota issue, while import HRC prices in southern Europe have settled at €580-610/mt CFR mainly for June-July arrival, against €580-630/mt CFR last week.