Trade for hot rolled coils globally has been reviving this week as more markets have resumed daily operations after the holidays. In Europe, local official prices have increased, giving hope to suppliers, while in Turkey prices have stabilized at high levels, amid strong scrap prices and the lack of aggression in the import segment. Moreover, buyers on the northern side of the Suez Canal and the Red Sea are cautious regarding possible additional risks to shipments through the area, which potentially may support HRC prices in the area. In the meantime, in Asia, India has returned to the market and traded several lots to the GCC and to the EU, while Vietnam has also been eyeing exports of HRC and has increased its offer prices. Chinese export prices have declined over the past week due to futures fluctuations and increased inventories. The recent drop in iron ore prices may put additional pressure on finished steel prices, but the impact may be limited by the currently decreased production levels.
The European HRC market has returned to work this week after a long holiday period, but is still taking its time to resume normal business operations. Also, activity has not yet been fully restored in terms of demand and restocking. Local producer ArcelorMittal has increased its offer prices by €50/mt and market players are waiting to see the market reaction. Сurrently, in the northern part of the EU the mills are offering at €770-800/mt ex-works, while the maximum tradable level for March deliveries is currently estimated at €740-750/mt ex-works. In the southern part of the EU, some producers are aiming for €750/mt ex-works, while the tradable range is now estimated at around €700-730/mt ex-works. In the import segment, the situation is somewhat complicated. On one side, demand has not yet revived, though a couple of deals have been closed. Buyers are aiming to estimate the situation in the Red Sea and how it might affect their operations. In addition, there are concerns regarding the quota for the first quarter of the year, particularly as regards the “others’” quota being exceeded. This week, there have been deals from Egypt reported to Italy at $730-735/mt CFR for around 20,000 mt. The offer levels are still mostly the same. In addition, according to sources, India has traded close to 20,000 mt of HRC to the EU at $695/mt CFR, but the sales are not considered to be very fresh since currently India is offering at €650-670/mt CFR EU depending on the destination, which comes to around $715-735/mt CFR. The most recent offers for HRC from Taiwan have been reported at $700-710/mt CFR, following a few sales at $670-680/mt CFR closed before the holidays. As for Turkish mills, they are out of the picture for now with their indications at around €670-690/mt CFR duty paid or $680-700/mt FOB. However, if the situation in the Red Sea deteriorates, Turkey may be chosen as a less risky source for imports to the EU.
In Turkey, HRC prices have not moved much over the past week. Demand is still mainly coming from the domestic market, while for exports there has been some positivity with the recent price increase in the EU. Import scrap prices have rebounded in Turkey, while import HRC offers are still not numerous and so local mills are not in a rush to provide discounts. Domestic HRC prices in Turkey are still at $700-720/mt ex-works for March deliveries, with some $5/mt discounts possible. Some producers have been voicing $730/mt ex-works, but the level is not considered to be workable. As regards exports, Turkey is offering at $680-700/mt FOB, but the price idea from European customers is generally not above $660/mt FOB, at least for now. The recent hike in domestic HRC prices in the EU, coupled with the increased risks for shipments via the Red Sea, may provide Turkey with a better chance to sell to Europe. In the import segment, China has sold at least 20,000 mt of HRC to a Turkish pipe maker for a specific breakdown, evaluated at around $625/mt FOB base. Another 20,000 mt for a pipe-making breakdown has recently been sold to another buyer and again at around $625/mt CFR base. The most recent offers for Q195 HRC from China have been reported at $610-615/mt CFR for end-of-February shipments. In addition, there was a 20,000 mt deal for HRC from Egypt at $705-707/mt CFR, again to a Turkish pipe maker, while the latest export indication from the Egyptian producer has been set at $690/mt FOB. In addition, India has returned to the market with $650/mt CFR offers for March shipments, but is unlikely to become more aggressive in the Turkish market since the suppliers are targeting higher prices in sales to the EU.
Chinese HRC export prices have posted a decline this week, amid the decrease in local HRC prices given the fluctuations of HRC futures prices, coupled with increased inventory levels and the decline in iron ore prices. Though large mills have been trying to keep offers firm so far, offers from several Chinese traders, in short positions especially, have decreased and new levels have been confirmed in deals. The tradable levels for ex-China SS400 HRC stand at $555-575/mt FOB, down by $7.5/mt over the past week with the lower end of the range confirmed in small deals to Vietnam. Most ex-China SS400 HRC prices in the Middle East have been estimated at $600-610/mt CFR, against $610/mt CFR last week, while some buyers still claim offers from Chinese first-tier mills are at $615-620/mt CFR, the same as last week. The market is closely watching the situation in futures and the overall allocation of mills, as more plants have been prolonging or starting maintenance works, trying to avoid losses.
In Vietnam, the local market has seen another price increase from one of the main producers, by $22-30/mt, following the $35/mt hike in the previous month, although overall the mood in the Asian flats market is not so good for now. Currently, Formosa Ha Tinh Steel (FHS) is offering non-skin-passed SAE1006 and SS400 HRC at $647-665/mt CIF, while skin-passed SAE1006 material is available at $652-670/mt CIF, all for March-April shipments. It is believed that the mill has taken potential HRC exports as a basis for its price increase, while the situation in the local market is generally not so favorable while local buyers focus on small purchases of Chinese HRC, which are available at $600-610/mt CFR for SAE1006 quality. Given buyers’ lower bids, the SteelOrbis reference price for the mentioned HRC grade has declined by $5-10/mt over the past week to $590-605/mt CFR. Vietnamese buyers have booked SS400 HRC at $570-575/mt CFR, while Q195 coils have been accepted at $565-570/mt CFR. In addition to China, India is also back in the market with offers at $625-630/mt CFR Vietnam. In this situation, Vietnam is eager to step up exports, particularly given the domestic price hikes announced in the primary destination, the EU. The latest offers to Europe have been reported at $720/mt CFR, with offers to the UK and Mexico at $735/mt CFR. In the regional market, Vietnam’s offers are at $655/mt CFR to Malaysia, which is almost in line with domestic prices in Vietnam itself.
India has been gradually returning to the export markets amid increasing interest from the Middle East, renewed offers to Turkey and the rather promising European market. HRC export prices from India have been estimated at $605-675/mt FOB, down $5/mt from the end of last week, while the higher end of the range traditionally corresponds to offers to Europe. In particular, there has been information regarding a deal from India to the EU at $695/mt CFR, while the most recent offers have been set at around $710-715/mt CFR or €650/mt CFR. Although the recent price hike in the domestic flats market in Europe supports the optimism regarding prices in the import segment, the worsened situation in the Suez Canal and risks in terms of navigation in the Red Sea may create risks for suppliers from Asia to the EU. In the GCC, ex-India offers have been reported at $635/mt CFR UAE, while the same price is reported to have been closed for two 15,000 mt lots to Oman and Qatar, while in Bahrain a large lot has been sold at $5/mt higher. Vietnamese buyers have been receiving offers from India at $635/mt CFR, as SteelOrbis has reported.
In the GCC, despite the lower ex-China offers, this week's trade activities have been busy, and Indian material has been chosen by several GCC-based purchasers, while ex-India offers for end-of-January shipment remain unchanged from last week at $635-640/mt CFR. As previously stated, Indian suppliers sold 20,000 mt of HRC to Bahrain at $640/mt CFR, whilst another batch of 15,000 mt was bought by Omani purchasers at $635/mt CFR. Furthermore, Qatar purchased around 15,000 mt from India at $635/mt CFR, though this has not yet been confirmed. Meanwhile, Chinese suppliers, who have one of the market's cheapest options, have stayed consistent this week, maintaining offers for SS400 at $600-620/mt CFR for February delivery to the UAE. However, offerings for SAE1006 grade HRC shipment in February have increased by $10/mt to $630-640/mt CFR to the UAE. In contrast to other competitors in the market, South Korean suppliers have remained mute and are continuing to hold offers back for the time being.