Global hot rolled coil (HRC) prices have continued to decrease in all the key markets and the size of the provided discounts has been rather large this week. In Asia, the increased number of offers from Chinese suppliers, especially non-VAT traders and prices becoming more and more competitive triggered price drops in all main trade destinations. In addition, weaker market in the EU, which has been higher-priced for a while, has also affected Asian suppliers positions, with offers from India heard at around $40/mt lower as compared to last week. Business activity in Turkey’s HRC market has remained weak, with more discounts heard to be announced for European buyers, while some interest has been seen in the import segment given more discounts from Chinese suppliers.
Chinese HRC suppliers including big and smaller mills, as well as traders, have kept correcting their offers down for overseas buyers, given the lack of significant support from the domestic market and the continuous declines in futures HRC prices. Particularly, export offers for boron-added SS400 HRC from large Chinese mills have settled at $565-580/mt FOB, with the midpoint at $572.5/mt FOB, down by $2.5/mt week on week. Tradable SS400 HRC prices have settled at $525-540/mt FOB, against $530-550/mt FOB at the beginning of this week. According to sources, several deals for ex-China SS400/Q195 HRC have been reported at $535-540/mt CFR, and even at slightly lower levels, while more deals have been also signed in Turkey at $575-590/mt CFR and in the Middle East at around $570/mt CFR for Q235 HRC.
In Vietnam, local producer Hoa Phat Group has announced its new offers for domestic customers, decreasing them by around $20/mt month on month to VND 14,690-14,720/kg ($594-596/mt) CIF, as the falling import HRC market has continued to affect the mood of Vietnamese buyers.
At the same time, offers for SAE1006 HRC have been rare in Vietnam, with the indicative prices from Chinese traders estimated at $580/mt CFR for April-May shipment, down by $5-10/mt week on week, while offers from Chinese mills have still been estimated at around $590/mt CFR. Besides, several offers for ex-Taiwan SAE1006 HRC via traders have been reported at $590/mt CFR for the same shipment period. Furthermore, the latest offers for ex-China Q195/SS400 HRC mainly from Chinese non-VAT traders have been reported at $535-543/mt CFR for April-May shipment, against $542-545/mt CFR at the beginning of this week and down by $7-10/mt week on week. According to sources, following several deals for Q195 HRC reported at the beginning of the week at $537-540/mt CFR for April shipment, new deals have been heard at $530-535/mt CFR by the end of the week. Thus, the SteelOrbis reference price for import SAE1006 HRC has moved to $580-590/mt CFR, down by $5/mt on the lower end of the range week on week since, despite the sharp drop in price for ex-China pipe-making HRC, discounts for SAE1006 HRC have been rather limited, while trade has remained poor so far.
At the beginning of the week, ex-India HRC prices were maintained by sellers at relatively stable levels as compared to last week at $580-650/mt FOB. However, by the end of the week, talks about a few deals for 20,000-30,000 mt of ex-India HRC signed at €605/mt CFR southern Europe have been circulating in the market, which translates to around $660/mt CFR, or around $610/mt FOB. Furthermore, by the end of the week a few orders for Indian origin materials have been reported in the Middle East at around $600/mt CFR, or around $570/mt FOB. Thus, by Friday, March 8, the price range for ex-India HRC has moved to $570-610/mt FOB level, down by $10-40/mt.
Tradable HRC prices both in northern Europe and in Italy have decreased once again by around €20-25/mt over the past week to €720/mt ex-works and €680-690/mt ex-works, respectively. At the same time, most European producers have kept refraining from giving firm offers, with indicatives standing at €720-730/mt ex-works for April-May deliveries in northern Europe and at around €700/mt ex-works in Italy. This means prices have lost around €10-30/mt week on week, depending on the supplier. At the same time, import prices have also been declining this week, with ex-Asia HRC offers heard at €605-620/mt CFR, against €620-650/mt CFR last week. However, interest in imported HRC is still limited due to the safeguard quota issue and longer lead times, coupled with the bearish outlook for both import and local prices.
Turkey’s HRC pricing has remained weak and the workable levels have slid once again, mainly due to the challenging exports to the EU and softer scrap. The local buyers exert pressure on the mills and expecting the HRC prices to hit bottom soon. The official offers have decreased by $5/mt this week to $670-690/mt ex-works, while the workable level is assessed at around $660-670/mt ex-works for the medium and large tonnages. Export offers are at $660/mt FOB and above, but some of the suppliers have been reportedly quoting around $630-640/mt FOB for European buyers. In the import segment, a 15,000 mt deal has been heard from China at $575/mt CFR for Q195 3 mm and up, while another lot of 2 mm HRC has changed hands at $590/mt CFR, sources say. The most recent offers from China have settled at $572-580/mt CFR depending on the supplier. In addition, a cargo from Egypt has been reportedly booked at $670/mt CFR effective, including grade extras. Offers from India have been set at $660-665/mt CFR and from South Korea at $680/mt CFR, which is not workable under current market conditions.
In GCC, buyers from the UAE and Saudi Arabia, in particular, have expressed an interest in ex-Japan material, despite ex-Indian and ex-China hot rolled coil (HRC) offers which are considerably more affordable. According to reports, Japanese suppliers recently sold around 15,000 mt and 20,000 mt of HRC to the UAE and Saudi Arabia for April shipping for $620/mt CFR and $630/mt CFR, respectively. In the meantime, offers to the GCC for shipments in April from ex-Japan have been set at $620-630/mt CFR. On the other side, the downward trend in ex-China and ex-India HRC offers for both April shipments continued this week, with offers from ex-China falling by $10-20/mt to $570-590/mt CFR and ex-India offers dropping to $615-635/mt CFR from $620-635/mt CFR.