The general mood in the global HRC market has remained negative this week even despite some rebound in futures prices and some spot prices in China in the middle of the week as a reaction to the announcement of a change in monetary policy by China for 2025. This news has failed to provide much support for the market as major fundamentals like the demand and supply balance have remained poor.
Local and some export HRC offers from Chinese mills rebounded on December 10, amid increasing HRC futures prices and China’s announcement of a “moderately loose” monetary policy for 2025. Nevertheless, the export market failed to react strongly with only some small mills and traders targeting small rises on Tuesday, which were called off by the end of the week. Export offers from major Chinese mills remained at $495-500/mt FOB and were corrected slightly to $490-500/mt FOB on Friday. Offers from small mills were heard from $483-485/mt FOB to $490/mt FOB in the first half of the week. But by Friday the tradable level for ex-China HRC has been corrected down again - to $478-480/mt FOB, confirmed in latest deals, and market sources believe that the next deals will hardly be above $475/mt FOB for non-VAT material. Local HRC prices in China have increased by just RMB 25/mt on average this week or equivalent to $3.5/mt. On Friday, December 13, HRC futures prices moved down, reflecting the ongoing weakness of demand during the winter.
The Vietnamese HRC market has remained weak in terms of both prices and demand, which has been confirmed by the recent move of the leading producer in the country, Formosa ha Tinh. On December 10, FHS announced prices for non-skin passed SAE1006 and SS400 HRC in the local market at the range of $516-529/mt CIF, down by $18-19/mt from that announced a month ago. Most market sources have said that they assess this as down by $10/mt from the previous discounted sales by the mill early this month. In any case, the prices have been assessed as being very competitive and sources believe that the mill will manage to push significant volumes and to trigger the current subdued demand. Even its local rival Hoa Phat’s offer is at $525/mt CIF minimum, while usually Formosa’s prices are $10/mt higher. Market sources are waiting for the announcement of the preliminary results of the investigation against Chinese HRC in January at the latest. Some rumours are circulating that they may be retroactive and at 20 percent on average, so the import market has been very weak.
Only a small deal for Chinese Q235 HRC was reported to have been done to Vietnam late last week at $490/mt CFR, versus previous offers at $502-505/mt CFR. This week, most offers from traders who still offer non-VAT material are at $500/mt CFR minimum, while others have been targeting $505/mt CFR or above. Indicative offers for Chinese SAE1006 HRC are stable at $515/mt CFR, though late last week an offer for non-VAT SAE1006 was as low as $505/mt CFR with no deal done, as reported by market sources.
Ex-India HRC prices have been at $510-540/mt FOB this week, only moving down slightly by $5/mt on average over the past week. Most bids have been reported at around $480-500/mt FOB, and bids even lower than $475/mt FOB were received late last week, resulting in persisting silent trade conditions. Only a slight decline was reported for ex-India HRC in at least one deal in the GCC market. Offers for ex-India HRC in the Middle East, the UAE in particular, have remained at $550/mt CFR for January shipment, or around $520/mt FOB. But, a result of negotiations, some tonnage changed hands at $540/mt CFR, translating to $510/mt FOB. October-December tariff quotas have still not been exhausted in Europe, but buyers in Europe are still not looking at imports even though offers are down by $5/mt from some sellers.
Turkey’s flat steel market fundamentals have remained rather weak with no improvement seen on pricing. Moreover, by the end of the week there has been a softening seen particularly in the domestic and import offers. The positive expectation from China’s awaited announcement regarding monetary policy has failed to result in some price upward moves and the situation has remained tense. Particularly, in Turkey, ex-China HRC offers have been at $530-535/mt CFR through most of the week, but later on slid to $528-529/mt CFR and even to around $515/mt CFR for non-VAT material. By the end of the week, there has been talk that China has sold 100,000 mt in total of HRC to Turkey at around $528-530/mt CFR and maybe slightly below to two re-rolling customers. Aside from China, Japan has been offering at around $540/mt CFR and a similar level has been heard for non-sanctioned Russian HRC, while the sanctioned material has been on offer at $505-510/mt CFR. No deals have been reported. In the domestic market, the official HRC offers have decreased slightly from last week to $570-580/mt ex-works in official offers and $560-565/mt ex-works levels are considered available from certain suppliers. As for exports, Turkish mills are officially at around $550/mt FOB, with $530-535/mt FOB levels reported to be available for some large customers.
In the UAE, HRC import activities have remained lively this week, notably for Japanese and Indian materials. Meanwhile, Chinese suppliers did not conclude any deals with Emirati buyers, owing to the increased movement in HRC pricing caused by favorable futures prices and news about the monetary policy in China. As a result, Emirati pipe producers purchased 20,000 mt and 25,000–28,000 mt of HRC from Japan at $522/mt CFR and $540/mt CFR, respectively. In addition, UAE re rollers have purchased 35,000 mt of HRC for February at $530/mt CFR. Meanwhile, currently Japanese suppliers’ offers to the UAE are at $525-540/mt CFR, down from $540/mt CFR last week. Furthermore, another sale from India to the UAE has been reported this week, with 25,000 mt of HRC sold at $540/mt CFR, down compared to earlier offers of $550-560/mt CFR. In contrast, Chinese suppliers being bullish about the market prices have decided to raise SS400 offers to the UAE for January shipment by $15-25/mt week on week to $515-525/mt CFR.
The European HRC market has been showing the expected signs of a further slowing down in terms of sales since the holiday period is approaching and buyers’ desire to restock diminishes. The prices therefore have remained stable as the suppliers, who have been searching for orders and trying to push customers, are not able to pull raise prices, but at the same time they do not foresee that sizeable discounts would trigger demand. The domestic HRC prices in southern part of the EU are at €590/mt ex-work for January-February deliveries, although the tradable levels have remained at €560-580/mt ex-works, with a few transactions reported at €550/mt ex-works. In the northern part of the EU, the mills are officially offering at €580-600/mt ex-works for deliveries within the first quarter of the year, while tradable levels have remained at €560-570/mt ex-works. Import offers this week have been mainly reported at €580-590/mt CFR from Asia and Turkey, while the earlier seen workable levels were at €540-560/mt CFR depending on the origin.