The mood and the price trends for hot rolled coil (HRC) in Asia have been demonstrating a certain pessimism, exerting pressure on other regions. The overall market situation in Asia has become more negative with prices from Chinese suppliers decreasing, driven by the futures price slump, while in India sellers have kept their prices largely stable with no new deals reported in the EU due to the safeguard quota issue, while competition has been tightening in the Gulf region. In Turkey, no signs of a solid recovery in HRC export offers have been seen so far, though many market players believe Turkey will try to increase its prices following the safeguard adjustment in the EU. At the same time, European mills are aiming to increase their HRC offers locally following developments in relation to the steel safeguard measures. However, this week most offers have remained stable while most European customers doubt the sustainability of the upward price trend amid the sluggish end-user demand in the region.
This week has brought another fall in HRC offers both from Chinese mills and traders, though trade has remained limited amid generally slow demand globally. Specifically, export offers for boron-added SS400 HRC given by major Chinese mills have come to $530-550/mt FOB, with a midpoint at $540/mt FOB, down by $5/mt week on week. Meanwhile, according to sources, most big mills have been offering their materials at $530-535/mt FOB, against $540-545/mt FOB last week, while only a few offers are still reported at $550/mt FOB and are considered to be unworkable. Meanwhile, the tradable level for ex-China SS400 HRC has been heard at $515-530/mt FOB, down by $10-15/mt week on week, depending on the destination. The lower end of the range corresponds to ex-China Q235/SS400 HRC offers in Vietnam at around $530-532/mt CFR, versus $545/mt CFR last week. In the meantime, domestic HRC prices in China have settled at RMB 3,905/mt ($539/mt) ex-warehouse on average on June 7, with the average price level RMB 45/mt ($6/mt) lower compared to that recorded on May 31, according to SteelOrbis’ data.
Ex-India HRC prices have remained stable at $560-600/mt FOB, depending on destination, but large mills have continued to suspend submitting offers, focussing on domestic sales, and are refraining from the aggressive pricing necessary to sell overseas. According to sources, with most large mills considering increasing domestic prices further, overseas sales at discounts have been abandoned and the expected rise in local demand after the formation of the new government later in the week would take care of excess production.
In Vietnam, local producer Hoa Phat Group has announced its new offers for domestic customers, decreasing them by around $10/mt month on month to $566-568/mt CIF. The decision of Hoa Phat to decrease prices was expected by most Vietnamese buyers given the bearishness mounting in the import segment, though some expected new offers at $560/mt CIF and below. The latest offers for ex-China Q235/SS400 HRC have been reported at $530-532/mt CIF, against $545/mt CFR last week. Besides, following several deals for ex-China SAE1006 HRC for at least 20,000 mt at $560/mt CFR around 10 days ago, new offers have been reported at $555/mt CFR, while bids have been heard at around $545-547/mt CFR levels. Other foreign suppliers have been less aggressive, with indicative offers for ex-Japan and ex-India SAE1006 HRC estimated at $570-580/mt CFR for July-August shipments. Thus, the SteelOrbis reference price for imported SAE1006 HRC has moved to $555/mt CFR, down by $5/mt week on week, since, even though most bids have been heard at below $550/mt CFR level, no deals have been reported so far below $555/mt CFR.
Although this week local HRC prices in Europe have remained at relatively unchanged levels compared to last week, market sentiments have improved following developments in relation to steel safeguard measures, with a number of market insiders expecting local mills to increase their offers for domestic HRC in the short run. Official offers from European mills have remained unchanged over the past week, standing at €640-650/mt ex-works in Italy and at €640-660/mt ex-works in northern Europe. However, the tradable prices both in Italy and in the north have remained at €630-640/mt ex-works. In the meantime, the new safeguard adjustments announced on May 30 have affected overseas HRC suppliers, especially those who are included in “other countries” category, with offers from Asia almost disappearing from the market this week. Thus, no offers have been heard from Vietnam, Japan, Taiwan and even India this week, while market insiders have reported indicative offers for ex-Turkey HRC at around €610-620/mt CFR Spain, including duty, versus €600/mt CFR last week, while talk about lower ex-Turkey HRC at €585/mt CFR Italy, including duty, has also been circulating in the market.
The Turkish HRC market has softened this week in terms of domestic and import pricing, given insufficient demand, some oversupply and payment issues. In particular, in the local market the lowest reported price is at $590/mt CPT/ex-works, while a level of $5/mt lower is also considered possible. Some official offers for July production are at $600-615/mt ex-works, while slightly higher levels are still at $620/mt ex-works, but with a shorter lead time. Overall, the prices have marked a $5-10/mt drop over the past week. In the import segment, the week started at $570-575/mt CFR for Q195 HRC for July shipments, down $10-15/mt. By the end of the week, the prices have slid to $565-575/mt CFR, but still with no takers. However, for exports, Turkish mills are trying to increase their prices from $590-605/mt FOB in the official offers to $600-610/mt FOB minimum, mostly for early August shipments. The suppliers count on an increase in interest from EU buyers because of the recent quota adjustment. In addition, ArcelorMittal Europe is expected to make an attempt to increase local HRC prices next week. However, it is still rather doubtful whether the increase will be fully accepted by buyers.
In the UAE, since the local market has not improved, consumers in the UAE have persisted in postponing their import decisions. Meanwhile, as futures prices in China have decreased, Chinese suppliers have lowered their HRC offer prices to the UAE. As a result, current SS400 HRC offers have fallen by $10/mt to $570-580/mt CFR for August shipment. Conversely, Indian suppliers who are also making proposals for shipments in August are still quoting at $600-620/mt CFR, the same prices they have been quoting for weeks. However, since demand from Emirati clients is still relatively low, South Korean and Japanese suppliers have been silent this week and have not provided any pricing.