The last week of July started with a significant fall in tradable ex-China HRC prices, which fell by a further margin of over $12/mt as the mood worsened amid declines in local and futures prices in China. The declines in Chinese HRC export offers exerted pressure on sentiments in the main trade destinations, including Asia, Turkey and the Middle East. Specifically, while import HRC prices dipped again in Vietnam amid aggressive ex-China offers, local HRC producer Hoa Phat Group announced its new prices for domestic customers, decreasing them by around $25/mt month on month. However, some rebound in HRC futures prices in China has started to appear at the end of the week, though most customers believe that the sustainability of any significant recovery is questionable. Indian HRC suppliers have continued to refrain from new export sales this week, while local prices for HRC in Europe have remained relatively stable, though with some downward bias reported in tradable prices.
At the beginning of this week, sentiments among Chinese HRC traders, which were bearish during the previous week, have worsened again, with the tradable level slumping by $12.5/mt on average to $475-490/mt FOB. According to market insiders, following several deals for ex-China Q235/SS400 HRC signed at $490/mt CFR Vietnam at the beginning of the week, down by $10-15/mt week on week, the material changed hands at $485-488/mt CFR by the middle of the week. Offers for ex-China SS400 HRC in the Middle East have been estimated at $530-535/mt CFR UAE for September shipment, down by $5/mt week on week, while ex-China Q195 HRC offers in Turkey have been heard at $525-530/mt CFR, down by $10/mt over the past week. According to sources, one of the largest re-rollers in Turkey has concluded a deal within the current range of offers. Meanwhile, export offers for boron-added SS400 HRC given by major Chinese mills are at $495-505/mt FOB, with a midpoint at $500/mt FOB, down by $2.5/mt week on week, while a number of large mills, such as Benxi Steel, who were offering their HRC at as high as $520/mt FOB last week, this week have cut their indicative prices to $515/mt FOB. Offers from smaller mills have been voiced at $490-495/mt FOB, while, according to sources, offers from Anfeng Steel have been voiced at $480/mt FOB. At the same time, by Thursday, August 1, sentiments had improved slightly in the Chinese market given the recovery seen in HRC futures prices.
Prices for HRC in the Vietnamese market have continued to decrease this week, with suppliers from China being the most aggressive. Prices of ex-China SAE1006 HRC offered by traders have dropped by around $10/mt over the past week, standing at $506-510/mt CFR for September-October shipment, while offers from Chinese mills have been estimated at around $515-520/mt CFR levels so far.
However, sentiments have been affected by concerns over the Vietnamese anti-dumping investigation into Chinese and Indian HRC announced this week.
Moreover, this week Vietnamese producer Hoa Phat Group has announced its new offers for domestic customers, decreasing them by around $25/mt month on month to VND 13,270-13,300/kg ($526-527/mt) CIF for September-October shipment. This move was expected by most Vietnamese customers, since during July ex-China offers for both SAE1006 and SS400 HRC had lost more than $30/mt, falling to $510-515/mt CFR and $485/mt CFR, respectively. However, with the rebound of HRC futures prices on August 1, sentiment has improved among suppliers, especially among Chinese steel mills, though most of them have not made any upward changes in their export offers to Vietnam so far.
Ex-India hot rolled coil (HRC) prices are mainly stable as compared to offers reported at the end of last week, but down by $20/mt since the beginning of last week, standing at $560-585/mt FOB. However, large Indian mills remain out of the export markets and are not submitting bids in the current volatile global conditions and prefer to push volumes locally. At the same time, stray bids from the main trade destinations, including the Middle East, were heard at as low as $520-530/mt FOB, but have been rejected by Indian mills which claimed that even discounted local sales ensure a better margin compared to sales overseas.
In Turkey, import HRC prices from China have continued to fluctuate this week, exerting pressure on domestic mills. However, Turkish producers have largely kept their prices stable and are most probably aiming to wait for a rebound in China. The week started with $520-528/mt CFR, down from $535-540/mt CFR, but later prices dropped further to $517-525/mt CFR and even a $514/mt CFR indication for a large lot was reported. Sources believe that at least one ex-China HRC cargo was booked at around $520/mt CFR by a re-roller and, overall, it is thought that prices may be close to bottom levels and so some restocking may be underway. Turkey’s domestic prices are at $570-580/mt ex-works for September deliveries, and the lower end of the range is not available even for small customers, but only from some sellers. As regards exports, according to sources, some significant tonnages have been sold lately within a range of around $565-575/mt FOB base to Europe, North Africa and Ukraine. The most recent export indications have been reported at $570-580/mt FOB, regressing to the levels seen two weeks back.
In the UAE, as Chinese suppliers have continued to reduce their HRC offers, Emirati purchasers have remained silent as regards importing this week, while keeping a close eye on the market. According to reports, Chinese suppliers' HRC offers for September shipment have dropped by $5/mt week on week to $530-535/mt CFR to the UAE. The previous HRC deals were at $535-540/mt CFR for August shipment, but no deals have been reported yet. Japanese suppliers, on the other hand, have maintained their previous week's HRC offer of $550/mt CFR for September shipment. Meanwhile, due to the ongoing slow trading activity, Indian and South Korean suppliers are still not offering to the UAE.
The current week has been rather quiet in the European hot rolled coil (HRC) market since most market players and businesses are already in holiday mode, especially those in southern Europe. The general offer level for HRC across the EU is at €630-650/mt ex-works for September delivery in the official offers from mills, the same as last week, while the workable levels are at €610-620/mt ex-works, against €620-630/mt ex-works reported last week. In the meantime, offers for import HRC have settled at around €565-605/mt CFR, against €570-610/mt CFR last week. The lower end of the range corresponds to ex-Vietnam HRC offers at €565/mt CFR, down by €5/mt week on week. However, interest in ex-Vietnam coils has been extremely limited given the new safeguard rules imposed in early July, coupled with the recent news regarding the anti-dumping probe against Vietnamese HRC. In particular, this week, the European Commission has notified Vietnam that it has received a complaint seeking the initiation of an antidumping investigation into imports of HRC, though it has not provided more details and has not identified the party that filed the complaint. At the same time, market insiders have reported higher interest in Turkish HRC this week, with a few bookings reported to have been signed at €560-570/mt CFR, including duty, against deal prices at €590/mt CFR last week. However, offers for ex-Turkey HRC are still voiced at €590-595/mt CFR southern Europe, including duty.