Given the negative sentiments still mounting in China amid the declines in HRC futures prices, Chinese suppliers have continued to aggressively drop their hot rolled coil (HRC) prices in new deals and offers, putting the global HRC market under continuous negative pressure. In particular, while suppliers from China have managed to sell sizable volumes at lower levels to Vietnamese pipe makers, exporters from India have decreased their HRC prices significantly in new offers to Europe, though failing to attract many buyers due to the slow demand in the EU. At the same time, the most aggressive import offers in Europe have kept coming from Asia, from Vietnam in particular, widening the gap with local prices to above €100/mt.
This week started with another drop in ex-China HRC prices, while trade has been active with discounts in Asia. Specifically, export offers for boron-added SS400 HRC from most large Chinese mills have settled at $545-560/mt FOB, with only a few offers still heard at $570/mt FOB, which means the midpoint has lost $15/mt week on week, falling to $557.5/mt FOB. Meanwhile, the tradable level for ex-China materials has settled at $520-530/mt FOB, against $530-550/mt FOB at the beginning of last week. According to sources, traders have been more active, with around 100,000 mt of ex-China Q235/SS400 HRC reported to have been sold in Vietnam since last Friday until today, March 12, at $535-538/mt CFR for April-May shipment, while new offers and even a few small deals have already been heard at $530/mt CFR, down by $12-15/mt over the past week. Ex-China SS400/Q195 HRC offers in Turkey have been voiced at $558-565/mt CFR, against $575-580/mt CFR last week. New offers from Chinese traders in the Middle East, the UAE in particular, have been heard at $560-565/mt CFR, against $570/mt CFR last week.
Indian HRC exporters have cut their prices this week amid rising competition, reacting to higher supplies at cheaper prices from China. However, local mills have still failed to attract buyers amid rising competition in Asia and the Middle East and slow consumption coupled with the safeguard quota issue in Europe. Sources said that ex-India HRC prices have been cut for all main destinations including Asia, the Gulf region and Europe, but the cuts have not been sufficient to meet buyers’ lower bids, with customers in Vietnam and the Middle East expecting more discounts as more offers flood in from China. Specifically, ex-India HRC prices have settled at $570-600/mt FOB, against $570-610/mt FOB at the end of last week and compared to $580-650/mt FOB at the beginning of last week. This week, most ex-India HRC offers have already been assessed at below $600/mt FOB, down by $10/mt week on week. Furthermore, a few orders for Indian origin materials have been reported in the Middle East at around $600/mt CFR, or around $570/mt FOB. However, most ex-India HRC offers are still estimated at around $620/mt CFR UAE this week.
In Vietnam, local producer Formosa Ha Tinh (FHS) announced new offers for domestic customers, leaving them at the same level as last month on Vietnamese dong basis, while prices in US dollars have decreased by around $15/mt month on month. More specifically, FHS’s prices for non-skin passed SAE 1006 and SS400 HRC in the local market for May-June shipments were cut by only $2-5/mt since the last revision in late February and were down by $15/mt as compared to initially announced offers and are now standing at $593-600/mt CIF Vietnam ports. Meanwhile, skin-passed SAE1006 coils have settled at $598-605/mt CIF, down by $15/mt month on month. According to most sources, the limited correction was below most Vietnamese customers’ expectations, with the gap between Formosa’s prices and ex-China prices widening to $35/mt for SAE1006 HRC and to over $60/mt for SS400 HRC. As for imports, following almost 100,000 mt of ex-China Q235/SS400 HRC booked in Vietnam at $535-538/mt CFR since last Friday, March 8, by the middle of the week new deals were already reported at $525-535/mt CFR, mainly for May shipment. This means deal prices for ex-China pipe-making HRC have lost around $10-12/mt since the beginning of last week. However, while more deals for pipe-making HRC have been reported at lower levels this week, Vietnamese re-rollers have remained rather restrained in terms of new SAE1006 HRC purchases. Most offers for ex-China SAE 1006 HRC have decreased to $560-570/mt CFR, down by $10-20/mt week on week. The SteelOrbis reference price for import SAE1006 HRC has moved to $560-565/mt CFR, versus $580-590/mt CFR last week.
In Europe, the negative mood has continued to prevail in the regional HRC market, while import prices have kept dropping further. Specifically, HRC prices from European mills are estimated at €680-720/mt ex-works for April-May delivery, down by €10-20/mt week on week, with the lower end of the range corresponding to offers in Italy and with the higher end corresponding to offers in the north. Meanwhile, tradable prices have been assessed at €690/mt ex-works for April-May delivery, against €700-720/mt ex-works last week, while workable prices in Italy have settled at €670-680/mt ex-works, versus €680-690/mt ex-works last week, with many suppliers still offering for April delivery. In the meantime, import HRC prices in southern Europe have continued to show declines this week, falling to €580-630/mt CFR, versus 600-640/mt CFR last week. The lower end of the range corresponds to ex-Asia offers directly from mills, while HRC offers from Egypt and Turkey have been voiced at €630/mt CFR for May shipment.
In Turkey, the HRC market has been under pressure from the declines in China and by the end of the week the mood has even worsened given the fall in the raw material and futures prices. Even before that, Chinese traders had started the week with $558-565/mt CFR offers for Q195 HRC of 3mm and higher, down from the previous $572-577/mt CFR. A 15,000 mt lot is reported to have been traded to the Iskenderun region at around $565/mt CFR at the end of last week, while no new transactions have been reported lately. Moreover, after the drop in iron ore prices, some HRC offers have fallen to $555/mt CFR, while rare bids have been reported at down to $550/mt CFR. The market is expected to gain clarity next week, most sources believe. As for Turkish origin HRC, the mood is mainly negative and this week information about large domestic bookings has circulated at $650/mt ex-works base, while the realistic official offers are at $660-680/mt ex-works, down $5-10/mt over the past week. Export offers are still at around $640-650/mt FOB officially, but the market already sees $630-635/mt FOB as acceptable for some sellers, while some buyers expect even $620/mt FOB to be seen soon.
In the UAE, trading activity has been sluggish since Ramadan has started, while importers anticipate a further softening of HRC offers. In the meantime, Chinese offers for April shipment have been reported this week at $560-570/mt CFR, down from $570-590/mt CFR the previous week. However, according to sources, other Chinese traders are reported to be offering far lower pricing, at about $550/mt CFR. Similar reductions have been witnessed in India, with offers dropping by $15/mt to $600-620/mt CFR. Ex-Japan offers, on the other hand, have remained at the same levels as last week, at $620-630/mt CFR for April shipment.