Most global hot rolled coil (HRC) suppliers have kept their offers stable this week, while the HRC markets globally have remained negative rather than positive, with most buyers anticipating additional discounts in the next round of bookings. In Asia, while the Chinese market has continued to witness fluctuations, Indian suppliers have kept their offers stable with no trade activity reported so far. In Europe, the tradable level has been relatively unchanged, while mills have continued to “defend their prices” and are avoiding any discounts. At the same time, Europe’s import HRC market has been affected by the uncertainty over the new safeguard measures and the reduction in volumes from countries which are major import sources. The HRC market in Turkey has been lacking clarity and – consequently - a reasonable price due to the limited demand, which forces traders to sell their products at a loss.
Ex-China HRC prices have shown some negative bias affected by fluctuations in local and futures HRC prices while local HRC prices have been showing ups and downs during the past week. Offers from big Chinese mills for boron-added SS400 HRC have settled at $540-550/mt FOB, with a midpoint at $545/mt FOB, down by $5/mt week on week, while, according to sources, most big mills have kept offering at $540-545/mt FOB. In the meantime, smaller mills and traders have been offering their material at $530-540/mt FOB, mainly the same as last week, though trade activity has been extremely slow. Meanwhile, following the constant ups and downs in domestic HRC prices in China during last week and this week, on Friday, May 31, domestic HRC prices in China have settled at RMB 3,900-4,000/mt ($550-564/mt) ex-warehouse, with the average price level RMB 10/mt ($1.4/mt) lower compared to that recorded on May 24, according to SteelOrbis’ data.
The average spot import HRC price range in Vietnam is stable week on week and conditions point to continuous stability throughout the coming weeks despite price fluctuations in China. More specifically, offers for ex-China Q235/SS400 HRC, which increased by around $5/mt to $545-550/mt CFR at the end of last week, this week have rolled back to $545/mt CFR, mainly for July shipment. At the same time, according to Vietnamese buyers, a few deals were reported at around $542/mt CFR at the beginning of this week. Meanwhile, workable prices for SAE1006 HRC of Chinese origin have remained at $560/mt CFR for July shipment, with a deal for around 8,000 mt reported to have been done at the abovementioned level at the end of last week. Other foreign suppliers have been staying out of the Vietnamese market, with indicative offers for ex-India and ex-Japan HRC at $580-590/mt CFR, the same as last week. In fact, while no deals have been heard for ex-India HRC in Vietnam, conversely Vietnamese producers have sold around 65,000 mt of HRC in India at $590-595/mt CFR following the approval of BIS certificates around 10 days ago, according to sources.
Ex-India HRC prices have been kept mostly stable by most large mills, though a slight upward correction has been seen this week, mainly given the absence of new deals with discounts. Specifically, offers from Indian mills have been voiced at $560-600/mt FOB, against $550-600/mt FOB last week. Offers for Indian HRC in Europe have been reported at $650-655/mt CFR, which translates to around $590-600/mt FOB, the same as last week, while the lower end of the range corresponds to indicative offers in the Middle East and Asia. At the same time, most market insiders have remained rather pessimistic in terms of the future market sentiments.
In Europe, even though local sales have remained extremely slow, domestic HRC prices have been kept mainly unchanged over the past week with mills continuing to “defend their prices” and avoiding any discounts. Specifically, the tradable prices both in Italy and northern Europe have remained at €630-640/mt ex-works, while official offers from mills have been voiced at €640-650/mt ex-works in Italy for July delivery, and at around €640-660/mt ex-works northern Europe for delivery in July and August, relatively unchanged from last week. Meanwhile, the import segment has been affected by uncertainly over safeguard measures, with market insiders waiting for the decision of the European Commission to be announced before the expiry date of the current quota on June 30. Most ex-Asia HRC offers have been estimated at €600-620/mt CFR levels, the same as last week. According to sources, given the uncertainty over the “other countries” quota, European customers have been booking “safer” material from Turkey during past weeks. In particular, at the end of last week-beginning of this week, a deal for around 45,000 mt of ex-Turkey HRC is reported to have been signed at around €600/mt CFR, including duty, while towards the end of this week the new deal prices are already estimated at €610-620/mt CFR.
Turkey’s HRC market has remained rather weak in terms of business activity, taking into account low end-user demand and the tough financial situation in the country. The official domestic prices have remained at $610-625/mt ex-works base for July deliveries. The focus of Turkish mills is still on exports rather than on local trade since inquiries have kept coming, though buyers have not been ready to accept increased prices. While mills have been trying to increase the offers to $600-615/mt FOB, European customers are still not accepting above $585-590/mt FOB. In fact, the mentioned range has been fixed recently in 20,000-25,000 mt deals to Italy and Spain. In the import segment, Turkey has been receiving offers from China at around $580-590/mt CFR for July shipments, with no deals fixed since re-rollers are mainly postponing restocking due to the low demand for coated steel.
In the UAE, stillness has prevailed in import trade this week as local business activities have remained slow. Meanwhile, SS400 HRC offers from Chinese suppliers are fairly stable compared to last week, at $580-590/mt CFR for August shipment. Likewise, Indian suppliers have been offering similar offers at $600-620/mt CFR for August shipments since last week. However, due to the GCC's continued lack of interest, suppliers from South Korea and Japan have decided to withdraw their offers this week.