This week, sentiment in most hot rolled coil (HRC) markets has remained largely positive though trade has still been limited in the majority of regions given the lack of demand. Specifically, most Asia-based HRC sellers have become more bullish in talks with their buyers in the region and in distant markets following another hike in China’s HRC futures prices and, consequently, in exports quotes. At the same time, although both in Europe and Turkey domestic HRC prices have been maintained at higher levels, import trade has been rather occasional, while most buyers are not fully convinced that the trend will be sustainable. Furthermore, similar to the EU and Turkey, customers in the UAE have also been delaying bookings in response to the recent increases in HRC import prices, particularly those from China.
Chinese HRC exporters have continued to be bullish this week, given the rising trends of futures and local HRC prices, along with the strengthening of the Chinese currency against the US dollar. In particular, following the increase at the beginning of the week in export offers for boron-added SS400 HRC by $10/mt week on week to $565-580/mt FOB, by the end of the week major Chinese mills have increased their offers by $2.5/mt on average to $570-580/mt FOB for January shipment, amid the continuous hikes in HRC futures prices. Meanwhile, the tradable price level for ex-China SS400 HRC has been estimated at around $550-565/mt FOB, versus $540-550/mt FOB at the end of last week and up by $17.5/mt on average compared to Tuesday last week. The lower end of the range corresponds to ex-China deal prices for SS400 HRC in Vietnam at $562-565/mt CFR Vietnam, while some offers have already reached $570/mt CFR. Meanwhile, several deals for ex-China materials are reported to have been signed in Turkey at $585-595/mt CFR, while ex-China Q195 HRC offers have been voiced in Turkey and also in the Middle East at around $595-600/mt CFR.
The rising trend of HRC import prices in Vietnam has continued unabated with ex-China HRC booked this week. More specifically, while offers for ex-China SAE1006 HRC have risen to $580/mt CFR, up by $5-10/mt week on week, a deal for around 30,000 mt of HRC from a first-tier Chinese mill has been signed at $578/mt CFR for January shipment. Besides, some ex-China offers from mills have already been heard at as high as $585-600/mt CFR. Several deals for ex-China Q195 HRC have also been heard at $558/mt CFR, up by around $15/mt on average since the beginning of last week, while most ex-China Q195 offers have been estimated at $560/mt CFR. At the same time, offers for SS400 and Q235 HRC have been voiced at $565-572/mt CFR, depending on the supplier, though a few small batches are reported to have been sold in Vietnam at $562-565/mt CFR this week. However, despite new import deals, most market insiders have continued to claim insufficient domestic steel demand, which has also resulted in more ex-Vietnam sales to overseas buyers. Thus, more than 50,000 mt of ex-Vietnam HRC in total have been sold to Europe and South America at around $590/mt FOB over the past two weeks. Besides, according to sources, several batches for at least 40,000 mt in total of ex-Vietnam HRC were also sold in Southeast Asia, in Malaysia in particular, at around $600-610/mt CFR during the past two weeks.
Even though prices have been improving in the Asian region, led by ex-China HRC gains, trade activity has still been too slow for Indian sellers, who are more optimistic of securing better prices in the months ahead in the European market. This week, Indian mills have mainly maintained their HRC export prices at $590-640/mt FOB, where the lower end of the range corresponds to indicative offers in Asia and the Middle East, while the higher end corresponds to offers in Europe. Besides, several offers have been voiced at even $650/mt FOB, given the euro’s fluctuations against the US dollar this week. In particular, following several deals signed at €640/mt CFR in southern and northern Europe last week, ex-India HRC is reported as being offered to Italy at around €630/mt CFR, which translates to around $640/mt FOB, while ex-India HRC offers in Spain and northern Europe have been heard at around €640/mt CFR, the same as last week, but higher by $10/mt on FOB basis at around $650/mt FOB.
Most European producers have maintained their offers for January-February deliveries unchanged at €650-680/mt ex-works, though sentiments have remained rather positive in the EU HRC market. At the same time, the tradable levels have settled at €630-640/mt ex-works in Italy, up by €5/mt on the higher end of the range week on week, while in northern Europe the workable levels have settled at €650-660/mt ex-works in a few deals reported in Germany, against €645-660/mt ex-works last week. In the import HRC segment, prices have continued to rise in Europe, reaching €620-650/mt CFR, depending on the origin, up by €5/mt week on week. Most offers for ex-Asia HRC in Italy have been estimated at €620-630/mt CFR, with offers for ex-Indonesia, ex-Japan and ex-India materials at around €630/mt CFR. Meanwhile, suppliers from Japan have been offering at €650/mt CFR Spain, up by €10/mt week on week. Besides, following numerous deals for ex-Turkey HRC at €630-640/mt CFR including duty last week, this week new ex-Turkey HRC offers have been voiced at around $710/mt CFR, or €650/mt CFR including duty.
In Turkey, HRC prices have been rather firm this week, staying at $660-670/mt ex-works in offers, while the workable levels have inched up to $650-655/mt ex-works over the past week. In the export segment, the price idea is closer to $640-650/mt FOB, which is not very workable though. Imports are still mainly represented by China since all of the other origins seem to be unworkable. A 25,000 mt deal was closed at $585/mt CFR base at the end of last week and a fresh sale has been confirmed at $595/mt CFR for 10,000 mt. Offers have settled at $600-605/mt CFR, up by $10/mt over the past week.
In the UAE, while China has continued to boost its export offers, UAE customers have continued to conclude purchases and to keep track of market developments. According to market participants, the continuously increasing prices of imports have become very costly in light of the ongoing weakness of the local market. Over the past week, Chinese suppliers have raised their SS400 grade HRC price by $10-15/mt to $595/mt CFR UAE for January shipping. Similarly, for SAE1006 grade, January shipment ex-China HRC has been offered at $600-620/mt CFR to the UAE, up from $590-595/mt CFR last week. Meanwhile, in South Korea, despite having opted not to make fresh offers, one supplier has sold 5,000-6,000 mt of HRC to the UAE in recent weeks at the last-indicated pricing of roughly $585-595/mt CFR. In contrast, another supplier in South Korea, according to sources, has offered HRC to the UAE at approximately $600-605/mt CFR, and Japan is heard to have offered to the UAE at around $610/mt CFR, though no booking has been reported at these prices.