Following sharp hikes seen in most regions globally last week, this week the majority of hot rolled coil (HRC) suppliers have decided to maintain their export offers relatively unchanged, though still with upward bias in Asia at the beginning of the week, in China, Vietnam and India in particular. At the same time in China the general mood has remained unclear following ups and downs in futures HRC prices, affecting Chinese export trade significantly, however, most ex-China HRC deals have been reported at stably high levels in different regions this week, including those in Vietnam, Pakistan and even for small quantity in Turkey.
At the beginning of the week Chinese HRC suppliers have been making new attempts to increase their offers given further improvement seen in the domestic and futures markets in China, coupled with the solid support from raw material prices. However, during the week Chinese confidence has been wavering due to fluctuations in Chinese HRC futures prices while the general level of business activity has been rather moderate, while the higher prices targeted for ex-China HRC have not been achieved. More specifically, export offers for boron-added SS400 HRC from large Chinese mills have settled at $580-590/mt FOB, with a midpoint at $585/mt FOB, up by $7.5/mt week on week. Meanwhile, despite buyers’ resistance the tradable level for ex-China SS400 has moved up as well, reaching $565-575/mt FOB, depending on the destination, against $550-560/mt FOB last week. The lower end of the range corresponds to ex-China offers in Vietnam at $575-580/mt CFR, up by around $15/mt over the past week, while offers for Q195 HRC have reached $570/mt CFR, with a few deals for around 10,000 mt reported at $567-570/mt CFR this week. At the same time, several deals have been also reported for ex-China Q195 HRC at $565/mt FOB or around $600-605/mt CFR this week. According to sources, ex-China HRC prices are likely to see some downward correction following previous sharp rally, though they might revive again sharply ahead of Chinese New Year in February.
In Vietnam, despite ex-China HRC price hikes which resulted in new deals in Vietnam this week, sentiment has been uncertain over the future price trend in the short run in China. Specifically, more deals for ex-China Q195 for at least 10,000 mt in total are reported to have been signed at $567-570/mt CFR, against $555-560/mt CFR last week. Furthermore, several deals for ex-China Q235 HRC have been heard at $570/mt CFR. Offers for ex-China SS400 HRC have been estimated at around $575-580/mt CFR, up by around $15/mt over the past week. Furthermore, a deal for around 10,000 mt of ex-China SAE1006 HRC has been reported at $590/mt CFR for January shipment, up by $10/mt week on week, while most ex-China SAE1006 HRC offers have been voiced at $590-620/mt CFR. Thus, the SteelOrbis reference price is now at $590/mt CFR, against $580-585/mt CFR last week. At the same time, Vietnamese producer Formosa Ha Tinh Steel (FHS) has announced its new HRC prices for the local market, increasing them by $35/mt compared to November, even slightly more than had been expected by some market sources.
Ex-Indian HRC prices have generally been estimated in the range of $620-660/mt FOB as compared to $600-660/mt FOB last week, with the lower end of the range corresponding to indicative offers in Asia and the Middle East. At the same time, Indian sellers have remained focused on sales to Europe, quoting higher in the range of $650-660/mt FOB in Europe, or at around $700-710/mt CFR, just before the market closes down for the holidays, achieving modest success in pushing through deals in the region, while trade in other destinations remains in a lull due to more competitive offers from Chinese suppliers. At the same time, according to sources, more than 50,000 mt of ex-India HRC were sold in Europe during the past week of November-first weeks of December at around $695-705/mt CFR.
Most European mills have maintained their official HRC offers relatively unchanged at €700-720/mt ex-works, however, the tradable price levels have gained another €10-15/mt week on week, reaching €670-680/mt ex-works in Italy and €685-695/mt ex-works in Germany, both for February delivery. According to sources, the uptrend has slowed down as more market insiders believe production cuts will not be able to sustain further growth and some production capacities, which were halted earlier, are expected to be relaunched soon. Thus, with higher availability, there will be no chance for further price hikes. Meanwhile in the import segment, most ex-Asia HRC prices have been voiced at €640-650/mt CFR, up by €10-20/mt week on week. At the same time, while most foreign suppliers have been struggling to attract European buyers, several batches for ex-India HRC are reported to have been sold in Europe at $700-710/mt CFR, which translates to €640-650/mt CFR for February shipment. Offers for ex-Turkey HRC have been voiced at around €680/mt CFR, including duty, up by €20/mt over the past week.
In Turkey, HRC prices have stabilized this week, following a rapid hike seen a week earlier. Since the import scrap prices have stopped rising and the HRC sales, though livened, still remained insufficient, the mill maintained the offers at $700-710/mt ex-works and up to $720/mt ex-works. The material is mainly offered for February-March deliveries. Some of the sources have reported the workable levels in the local market have reached $690-705/mt ex-works, but for small lots. On exports, the levels are at $660-680/mt FOB. In the import segment, the offers from China have been mainly reported at $605-615/mt CFR depending on the supplier and the lead time for Q195 quality and at up to $620-630/mt CFR for SAE1006. Only minor fresh deals at $605/mt CFR have been reported, following the earlier concluded deals for at least 95,000 mt within $605-618/mt CFR for January shipments. Noteworthy, India has returned to the market after a long while of absence with $660/mt CFR offers, which are not workable in Turkey. In addition, Egypt is still taking its time to announce the offers to Turkey, but the expected level is still around $690/mt CFR, based on the supplier’s earlier sales to the EU.
Some activity has been seen from Russia on HRC export markets, although overall the suppliers are still mainly focusing on the domestic market. However, the local demand has started to slide due to seasonal reasons, therefore some allocation has been offered for the foreign customers. Particularly, one of the Russian mills has continued selling to North Africa and traded additional 30,000-35,000 mt in several deals at around $615/mt CFR, while previously the similar lot had been sold at $610/mt CFR. The FOB Black Sea price equivalent is at around $570-575/mt FOB.
In the UAE, since domestic business activity has improved this week, Emirati customers in need of stock have decided to purchase some lots, favoring Chinese material once again. As a result, Emirati customers bought several lots of HRC at $610–615/mt CFR, while Oman purchased 14,000 mt of HRC at $605/mt CFR. However, Chinese suppliers, who noticed an improvement in trade, have continued to increase their HRC offers, which are presently fixed SS400 at $600-630/mt CFR to the UAE. Also, for the SAE1006 grade, some speculations circulated this week that the UAE purchased certain lots at $590/mt CFR, though current offers from China to UAE stand in the $610-620/mt CFR range. In the meanwhile, sources claim that certain Indian suppliers have begun to offer to the UAE for $640-650/mt CFR, and in recent weeks, they have sold HRC to the UAE for $600/mt FOB, which is approximately $630/mt CFR. In addition, ex-Japan has begun to offer roughly $640/mt CFR to the UAE this week, up from $620-630/mt CFR before. Noteworthy, ex-India offers have been reported at same $640/mt CFR levels following a long while of absence in the export markets.