The price trend for hot rolled coil (HRC) has been lacking clarity in the global market this week, with most suppliers trying to keep their offers stable, while no significant trade activity has been reported in most markets given the national holidays this week. Suppliers from China have mainly decided to roll over their export prices, with only some business activity reported in the Middle East for sales for prompt shipment. In Turkey, mills have kept seeking to keep their offers stable with the support of movements in the scrap segment. Meanwhile, only in Europe has sentiment remined cautiously positive this week as mills have not accepted any requests from buyers for additional discounts, aiming for higher prices in the next round of sales.
In China, most big mills have decided to roll over their export prices and, even though sentiments have worsened in the local market following the declines in futures prices, the tradable level has increased slightly over the past week given the absence of cheaper non-VAT offers from China in the market. Export offers for boron-added SS400 HRC given by major Chinese mills are at $540-560/mt FOB, the same as last week, while smaller producers have kept offering their materials at around $535-550/mt FOB. Meanwhile, following the news about inspections into non-VAT trading in China last week, this week many traders have remained out of the export market, while the tradable price level for SS400 HRC has settled at $530-545/mt FOB, versus $530-535/mt FOB last week. Offers for ex-China SS400 in the UAE have mainly been voiced at $575-585/mt CFR, up by $15-25/mt since the beginning of last week, though several deals for 5,000 mt at $570/mt CFR and for 10,000 mt at $575/mt CFR have been reported for prompt shipment this week in the UAE. Furthermore, according to sources, a deal for around 12,000 mt of ex-China HRC is reported to have been done to Oman at slightly above $570/mt CFR.
Most ex-India HRC offers have been kept stable at $550-585/mt FOB. However, market insiders have reported that for serious buying inquiries on loaded vessel basis mills are targeting from $565/mt FOB to $600/mt FOB, depending on the destination. According to sources, prices have mainly been kept unchanged by local mills who have continued to hold back deals given that bid volumes have been too low, coupled with expectations of a price rebound and the mills’ greater focus on better margins from local sales. Besides, another important reason for mills keeping their offers stable is that most Indian producers have planned shutdowns for annual maintenance works from early April.
In Vietnam, trade activity has remained extremely slow this week due to national holidays in Vietnam and also the Labour Day Holiday in China (May 1-5). At the same time, Vietnamese producer Hoa Phat Group announced its new local prices for HRC for August shipment on May 2, hiking them by $28/mt month on month to VND 14,640-14,670/kg ($576-578/mt) CIF, where the lower end of the range corresponds to the prices in northern and central Vietnam, while the higher price is found in the south. Although higher ex-China HRC import offers for Vietnamese buyers have played a role in setting Hoa Phat’s new prices, most Vietnamese buyers still believe the new levels are too high. In particular, on Monday, before leaving for their holiday, Chinese suppliers offered their Q235/SS400 HRC at around $540-550/mt CFR, the same as last week, though, according to Vietnamese traders, even lower offers at around $535/mt CFR were “of no interest to Vietnamese buyers”.
In the UAE, trading activity has begun to improve, notably for Japanese and Chinese materials, but demand locally, particularly for galvanized steel, is still weak. As a result, Emirati customers in need of stocks have bought 25,000 mt of HRC from Japan at $590/mt CFR for June delivery. Although China's SS400 offers for shipments in May and June have increased to $570-585/mt CFR from $560-585/mt CFR the week before, sources claim that China sold two separate HRC lots for prompt shipment to the UAE, consisting of 5,000 mt and 10,000 mt at $570/mt CFR and $575/mt CFR, respectively. In addition, China sold 12,000 mt of HRC to Oman last week for around $570/mt CFR. While South Korean suppliers have been missing from the market in recent weeks, this week they chose to provide HRC to the UAE at $610-620/mt CFR for June shipments. On the other hand, Indian suppliers keep putting off offers to the GCC while continuing to prioritize their domestic market.
Turkey’s HRC market has been feeling less pressure this week due to May Day holiday and non-aggressive import offers. In addition, the non-VAT trade issue in China is expected to support prices, particularly for HRC, at least in the short run. As a result, in the domestic market in Turkey a majority of offers have remained at $620-635/mt ex-works base mainly for June deliveries, while $610/mt ex-works was said to be possible for serious orders. As regards exports, Turkey’s HRC pricing has settled at $600-615/mt ex-works depending on the sales destination, but the lower end of the range is considered to be more realistic. Import offers from China have been indicative this week at $580-585/mt CFR for Q195 grade HRC of 3 mm and higher for June shipments. The latest deal for a medium-sized lot was closed at slightly above $580/mt CFR around a week ago. In addition, Egypt is in the market with $625/mt CFR for July shipments, but Turkish buyers are mainly insisting on discounts of at least $10/mt.
In Europe, sentiment in the HRC market has remained cautiously positive this week, as mills have not accepted any requests from buyers for additional discounts. This week, offers from European mills have settled at €650-670/mt ex-works for June delivery, with offers in Italy heard at €650-660/mt ex-works, up by €10/mt on the lower end of the range week on week, while offers from mills in northern Europe have been voiced at €650-670/mt ex-works, mainly the same as last week. Workable prices in the Italian market have been estimated at €630-640/mt ex-works, against €630/mt ex-works last week. In the north, tradable prices have been assessed at €640/mt ex-works. According to sources, even though steel consumption is still quite slow, EU suppliers are counting on customers’ low stocks. Besides, there are almost no cheap import offers anymore, with ex-Asia HRC prices reported at €600-620/mt CFR depending on the supplier, against €585-610/mt CFR last week.