Although hot rolled coil (HRC) export offers from China have softened over the past week, most Chinese suppliers have remained relatively non-aggressive globally given the non-VAT trading issue in China, while cheaper offers have mostly been appearing only in Vietnam. In the meantime, HRC producers in Turkey and Europe have been trying to keep their official offers stable at high levels, even though there have been no signs of a tangible demand recovery. Suppliers from India have maintained their prices stable as well though sentiments in India have worsened this week in the face of intensified competition from China.
The mood among Chinese HRC exporters has worsened this week amid lower futures prices. More specifically, by the end of the week, export offers for boron-added SS400 given by major Chinese mills have settled at $535-545/mt FOB, compared to $535-550/mt FOB at the beginning of the week, while offers from smaller mills have dropped to $530-535/mt FOB. In the meantime, tradable prices have been voiced at around $520-545/mt FOB, compared to $530-550/mt FOB last week, with the lower end of the range corresponding to non-VAT offers to Vietnam. According to sources, while ex-China SS400 HRC offers with VAT have been heard at $560/mt CFR, offers from non-VAT traders have been reported at $530-535/mt CFR, down by $10/mt week on week, with a few deals reported at the abovementioned level at the end of last week and beginning of this week. Furthermore, while initial offers for ex-China SS400 HRC in the UAE have settled at $575-585/mt CFR, down by $5/mt on the lower end of the range over the past week, market insiders have reported several deals from tube makers concluded at $561-570/mt CFR levels. Besides, most offers for Q195 HRC of 3 mm and higher have been heard in Turkey at $570-572/mt CFR for 40,000-50,000 mt and for June shipments. Discounts of a few dollars are considered possible. A week ago, the price levels stood at $580/mt CFR and above.
Indian HRC exporters have maintained their prices stable though sentiments have worsened this week in the face of intensified competition from China, while local sellers have not been pushing export sales in view of better margins in domestic sales and the expected tightening of supplies in the wake of mill shutdowns. In particular, ex-India HRC prices have remained at around $550-600/mt FOB, mainly the same as last week, but most offers submitted were not converted to deals, barring in a few exceptional cases for small tonnages. In the meantime, according to sources, in the next two months the market will see lower supplies from mills to the market and hence sellers will not be pushing deals overseas so much if the current low margins continue.
In Vietnam, the import HRC market has been lacking clarity as the gap with suppliers’ offers has widened this week. Specifically, the price range for imported Q235/SS400 HRC from different sources from China has been at $530-560/mt CFR Vietnam, according to reports from market sources. The lower end of the range - $530-535/mt CFR - corresponds to offers from non-VAT Chinese traders, against $535/mt at the end of last week and down by $10/mt week on week. Meanwhile, most mills have been offering their materials with VAT at $560/mt CFR and some at even slightly higher levels. Meanwhile, in the SAE1006 HRC segment, offers from Chinese mills have been estimated at $570/mt CFR and above, while the tradable level has been assessed at $555-560/mt CFR, following a deal from one of the Chinese mills for 50 percent 2.0 mm SAE1006 at the end of last week.
European HRC producers have continued to maintain their prices for local customers stable at high levels, refusing to provide any additional discounts, even though there have been no signs of a tangible demand recovery in the region. More specifically, official offers from mills in northern Europe have been reported at €655-660/mt ex-works, while the tradable prices have remained at €630-640/mt ex-works, both in northern Europe and Italy. In the import segment, most offers from foreign suppliers have remained relatively stable this week, though some offers have been reported at lower levels given that the euro has been showing a weakening trend against the US dollar. Most offers for ex-Asia HRC have been estimated at €600-620/mt CFR, compared to €600-630/mt CFR last week, while offers for ex-Turkey HRC have been voiced at €615/mt CFR, including duty, as compared to deal prices at €610-620/mt CFR last week.
Turkey’s HRC prices have remained relatively stable in the domestic market at $620-630/mt ex-works base, with talk heard about some deals at below $610/mt ex-works from some mills. As regards exports, hardly any offer to the EU is workable at higher than $580-590/mt FOB, which is in line with the massive deals in the first half of May. However, most official offers are at $600/mt FOB and above. In the import segment, China has stepped back from $580-590/mt CFR for Q195 material for June shipments to $570-572/mt CFR. No fresh deals have been reported yet since customers are aiming to postpone purchases due to the difficult market conditions and insufficient demand. Along with China, there are offers from Egypt at around $640-645/mt CFR or $620/mt FOB.
In UAE, although trade has been slower since Chinese suppliers have indicated a slight softening in the price of hot rolled coils, several tube makers in the UAE and Oman needing to restock have made some purchases this week. As a result, Omani and Emirati buyers bought some lots from China at $561-570/mt CFR. Meanwhile, SS400 offers from Chinese suppliers for August shipment have dropped to $575-585/mt CFR from $580-595/mt CFR last week. India, on the other hand, has not given offers, but some unverified deals have been reported. According to sources, Indian suppliers have sold 5,000 mt of HRC to Qatar at $560/mt FOB. Suppliers from South Korea and Japan have decided not to submit offers since trading activities in the GCC have slowed down significantly.