Most global hot rolled coil (HRC) suppliers have continued to keep their offers stable this week. However, the HRC market globally has remained negative rather than positive given the new decline seen in ex-China HRC prices due to the drop in futures prices in China, while most customers including those from Asia, the Middle East and Turkey have been seeking even more discounts. Trade activity in the EU HRC market has remained slow given the sluggish demand from end-users in the region ahead of the summer break, while most importers in the EU have been waiting for more clarity on import duty risks and are refraining from new purchases.
Chinese HRC suppliers including the big and smaller mills, as well as traders, have corrected their offers down for overseas buyers, given the lack of significant support from the Chinese domestic market and the continuous declines in HRC futures prices in China. More specifically, export offers for boron-added SS400 HRC from large Chinese mills have settled at $515-520/mt FOB, with the midpoint at $517.5/mt FOB, down by $7.5/mt week on week. At the same time, smaller mills have been offering their materials at $510-515/mt FOB, down by $5/mt over the past week, though talk about even lower offers at $505/mt FOB has started to appear in the market. At the same time, according to sources, ex-China prices have failed to reach the bottom so far, as most buyers have been holding back from concluding new purchases, bidding at lower levels instead. The tradable prices for SS400 HRC have been estimated at around $505-510/mt FOB, down by $5/mt on the higher end of the range week on week, and versus $508-515/mt FOB last week.
This week, import HRC prices in Vietnam have indicated new declines. However, despite the decreases, Vietnamese steel producer Formosa Ha Tinh (FHS) has announced new local HRC prices, mainly for September shipment, mostly at the same levels as in June. More specifically, FHS’ prices for non-skin passed SAE1006 and SS400 HRC in the local market for September shipment stand at $560-572/mt CIF, depending on the size of the order. At the same time, offers for skin-passed SAE1006 HRC have been estimated at $570-580/mt CIF. Thus, the prices have remained at relatively the same levels as last month. In the meantime, offers for ex-China Q235/SS400 HRC in Vietnam have been heard at $516-518/mt CFR for August shipment, versus $525/mt CFR at the end of last week. Besides, offers for ex-China SAE1006 HRC through traders have been assessed at $530-535/mt CFR, down by $5/mt on the lower end of the range week on week, while offers from mills have been heard at $540/mt CFR. Thus, SteelOrbis’ reference price for imported SAE1006 HRC has moved to $530-540/mt CFR, against $535-540/mt CFR last week.
Ex-India HRC prices are officially stable at $560-610/mt FOB, while several mills have confirmed submitting offers to Europe at the higher end of the range of $600-610/mt FOB, working out at around $655-670/mt CFR Antwerp, but the mills have declined to confirm if the offers were converted into deals. According to sources, European buyers’ price idea is at around $630/mt CFR, which is too low for Indian mills.
In Europe, the range of domestic HRC offer prices has remained mainly unchanged during the past week, though talk about ArcelorMittal and other big EU mills intending to increase their HRC prices for October delivery has been circulating in the market. Specifically, offers from mills have remained unchanged at €630-650/mt ex-works, with the lower end of the range corresponding to prices from Italian mills at €630-640/mt ex-works, while the higher end corresponds to offers at €640-650/mt ex-works in the north. At the same time, the tradable prices have been estimated at €620-630/mt ex-works. Meanwhile, import HRC trade has been limited this week mainly amid uncertainty over the safeguard quota issue. According to sources, most buyers need to custom-clear only some part of HRC orders, while the rest of the volumes should remain at ports to avoid paying duties. Offers for ex-Asia HRC have been estimated at €590-605/mt CFR, mainly the same as last week, “but the duty risk is deterring buyers for now”. Offers from Indonesia have been heard at €600/mt CFR, directly from the mill, while a deal for around 5,000-10,000 mt has been reported at €635/mt CFR, through a trader.
Turkish domestic HRC pricing has remained rather weak, mainly due to low offers from China. Although ex-China offers rebounded a little, they still remained low, undermining any attempts by Turkish suppliers to raise their prices. Local Turkish HRC prices for August deliveries have settled this week at $580-590/mt ex-works base, down slightly over the past week. Moreover, some buyers assume $570-575/mt ex-work could be reachable for large lots. As for exports, ex-Turkey offers have been at $580-590/mt FOB this week, with some negotiations held in the EU, particularly in Italy. Some buyers from North Africa are also reported to be seeking some material, but are looking for lower price levels. In the import segment, China has started this week with a decline in offers from $553-558/mt CFR to $545-547/mt CFR. At the time, buyers considered that some traders, who had been acting aggressively, would consent to sell at $540/mt CFR. However, by the end of the week, offers rebounded to $550/mt CFR and slightly above due to a small positive movement in futures prices in China.
In the GCC, this week HRC import activity has increased as Chinese HRC offers have appealed to Emirati and Omani buyers. As a consequence, even though business is still weak, the UAE has bought 27,000 mt of HRC and Oman has purchased 15,000 mt of HRC at $550/mt CFR for shipment in August, both from China. The latest offers for SS400 from China to the UAE are at $550-560/mt CFR, compared to $550-565/mt CFR the week before. Furthermore, this week, South Korean and Taiwanese suppliers have chosen to give the same offers to the UAE as last week at around $590-595/mt CFR. Meanwhile, Indian suppliers are still not offering and prefer their domestic market as trading activities in the UAE remain sluggish.