Business activity for hot rolled coils (HRC) has failed to recover in most regions globally considering the continuing weakness of demand in most outlets. At the same time, after the long Chinese New Year holiday, the mood has worsened in Asia due to the drop in HRC futures prices in China, while actual business activity has remained slow, In Europe, local tradable prices have softened once again this week given the lack of demand.
Chinese HRC suppliers have finally returned to the market this week from the long Chinese New Year holiday. However, most of them have been rather confused in terms of new price policies, given the worse mood in the domestic and futures markets along with the bearish sentiments among other HRC suppliers globally. More specifically, export offers for boron-added SS400 HRC given by major Chinese mills are at $580-600/mt FOB, mainly for April shipment, the same as before the holiday, two weeks ago. Meanwhile, smaller mills and traders have been even more cautious as regards new offers, with several deals reported at lower levels through traders in Vietnam. The tradable level for SS400 HRC from Chinese suppliers has been estimated at $545-560/mt FOB, down by $5/mt over the past two weeks. According to sources, while offers for ex-China SS400 HRC have been heard at around $550-560/mt CFR, down by $5-10/mt. Offers for ex-China SS400 HRC in the Middle East from the first-tier mills have been heard at $615-620/mt CFR, while offers from the second-tier mills have been heard at $595/mt CFR, though bids from most customers have been voiced at $580/mt CFR, according to sources. Besides, offers for Q195 HRC in Turkey have been reported at $595/mt CFR, the same as before the holiday.
Ex-India HRC prices have been heard in the range of $600-650/mt FOB, compared to $580-650/mt FOB a week ago, with the lower end of the range applicable for offers in the Southeast Asian region, in Vietnam in particular, where one of the largest Indian mills has been offering its materials at $610-620/mt CFR this week, up by $10-20/mt week on week. However, while offers in Asia have been voiced at slightly higher levels, in the Middle East, on the contrary, most offers have decreased to $625-630/mt CFR levels, down by $10/mt week on week, while a few deals are reported to have been done at $630/mt CFR at the end of last week to the UAE. Offers for ex-India HRC in Europe are still voiced at $640-650/mt FOB, the same as last week. However, talk about a deal for 8,000 mt of HRC from a western India-based mill for delivery to Antwerp done at $630-635/mt FOB has been circulating in the market, compared to $645-650/mt FOB heard a week ago. However, this information has not been confirmed by the time of publication.
After returning from the long Lunar New Year holiday, Vietnam’s HRC import market has faced another drop in prices from China given the negative sentiments mounting in the local and futures markets in the country. Specifically, offers for ex-China SS400 HRC in Vietnam have been estimated at around $560-565/mt CFR, down by $5/mt as compared to offers before the holiday. At the same time, several deals for ex-China Q235 HRC have been reported at $550-555/mt CFR, against deal prices at $554-556/mt CFR two weeks ago, while most offers for Q195/Q235 HRC have settled at $550/mt CFR and slightly lower, down by $5/mt over the period under review. On Friday, February 23, local Vietnamese steel producer Formosa Ha Tinh Steel (FHS) announced its new HRC prices for domestic customers, decreasing them by $39-50/mt month on month to $608-620/mt CIF.
In Europe, most buyers have been refraining from new purchases, anticipating a further drop in prices. Meanwhile, European producers have managed to maintain their offers at relatively stable levels as compared to last week, while tradable prices have been trending down in the EU, as transactions activities have remained scarce amid weak demand. The general range from mills in the EU HRC market is currently at €730-760/mt ex-works, the same as last week, with offers from Italian mills heard at around $730-735/mt ex-works, while producers in the north have been offering their materials at €740-760/mt ex-works, both for April delivery. However, the tradable level in Italy has dropped to as low as €720-725/mt ex-works in new deals this week, down by €5-10/mt week on week, while workable prices in northern Europe have been estimated at €720-730/mt ex-works, against €740-750/mt ex-works last week. In the meantime, import offers for ex-Asia HRC for delivery already almost in June, have been voiced at €620-660/mt CFR, down by €10/mt week on week. Offers for ex-Turkey HRC have been estimated at around €670-690/mt CFR, duty paid, against €700/mt CFR last week, though no new deals have been heard so far.
The Turkish HRC market has weakened slightly over the past week, particularly in terms of export prices, given the strong competition from some of the Asian suppliers and the downturn in the EU. The lowest export price for ex-Turkey HRC reported in the market stands at $660-670/mt FOB for large EU customers, while earlier the Turkish mills were not eager to go below $685-690/mt FOB. Still, the bids from the EU are much lower, although the buyers from North Africa may accept slightly higher levels. In the domestic market, HRC prices have slipped to $690-715/mt ex-works, versus $700-725/mt ex-works earlier this month, with material available for April deliveries. Some market sources report there are offers at as low as $680/mt ex-works from some mills, but several of them have denied this information. In the import segment, there have only been offers from China at $590-595/mt CFR, which is the expected level after the holiday. No transactions have been heard yet, but sources report buyers are seeking not to pay anything above $580-585/mt CFR.
In the UAE, there has been some interest in importing HRC since China returned with varied offer levels, while India displayed some softening in the market. Accordingly, the majority of buyers began to expect an additional softening in offers, while there is still a need to replenish stocks. In this context, the UAE and Qatar purchased 15,000 mt and 20,000 mt of HRC from India at $585-610/mt FOB. Despite ongoing trade, Indian suppliers' offers for March shipments have decreased by $10-15/mt to $625-630/mt CFR to the UAE. Meanwhile, ex-China HRC offers from first-tier mills have been heard at $615-620/mt CFR, whereas second-tier Chinese mills are offering at $595-610/mt CFR, resulting in general offers ranging at $595-620/mt CFR for shipments at the end of March and in April. South Korean suppliers, on the other hand, have chosen to withdraw their offers since the expected interest has not been seen in the GCC market.