The second week of September has turned out to be somewhat turbulent in terms of hot rolled coil (HRC) prices coming from China to many regions, with a slight recovery seen in HRC futures prices in China throughout the past week, though, despite the recovery of futures prices, Chinese HRC exporters have been less positive so far. At the same time, export offers from other HRC suppliers, including those from Asia and Turkey have been voiced at lower levels globally and especially in Europe, where local prices have kept falling this week. Suppliers from India, who have reduced their export prices, have succeeded in concluding in new sales to Europe, with additional discounts.
Although average HRC prices in the Chinese domestic market indicated some rises on Tuesday, September 10, amid a slight recovery in HRC futures prices, Chinese HRC exporters were less positive, with both big and smaller mills decreasing their offers for overseas buyers since demand remains an issue in the main trade destinations. More specifically, export offers for boron-added SS400 HRC by major Chinese mills settled at $455-465/mt FOB, with a midpoint at $460/mt FOB, down by $7.5/mt week on week. At the same time, smaller mills have been offering their materials at $435-450/mt FOB, down by $15-20/mt over the past week. However, the tradable prices for SS400 HRC have been estimated at $435-445/mt FOB, against $455-465/mt FOB, with the lower end of the range corresponding to ex-China Q235/SS400 HRC offers in Vietnam at $450/mt CFR, against deal prices at $445-450/mt CFR a few days earlier and down by $15/mt week on week. At the same time, a number of market insiders believe that prices are unlikely to fall further, as September demand appears better, amid lower inventories and mills’ stable capacity utilization rates.
Ex-India hot rolled coil (HRC) prices have declined after cuts in domestic base prices, but the prices have still been insufficient to drive sales, with only a few deals reported to have been signed in Europe by the middle of the week with additional discounts. More specifically, at the beginning of this week, ex-India HRC prices were reported at $540-560/mt FOB, against $550-565/mt FOB last week, though by the end of the week export offers have dropped to $540-550/mt FOB.
At the same time, market insiders have reported a few deals for around 20,000 mt in total of ex-India HRC signed at $600-610/mt CFR southern Europe, which translates to around $550/mt FOB. Although most market insiders believe that sales for ex-India HRC are risky as the safeguard quota for ex-India HRC is almost exhausted, other believe more deals will be heard this month, since as of September 12 65,900 mt could still be booked in Europe in the third quarter, out of a total third quarter quota of 301,703 mt, according to the official data from the European Commission’s Taxation and Customs Union.
Meanwhile, in Europe domestic HRC offers from mills have been estimated at €570-600/mt ex-works for October delivery, against €590-600/mt ex-works last week, with the lower end of the range corresponding to offers in Italy at around €570-580/mt ex-works, down by €10-20/mt week on week, while offers from mills in the north of Europe have settled at €580-600/mt ex-works, down by €10/mt on the lower end of the range over the past week. Meanwhile, tradable HRC offers have been estimated at around €560/mt ex-works and even slightly below both in Italy and in northern Europe, down by €20-30/mt week on week. Furthermore, offers for import HRC have been voiced at €530-580/mt CFR, depending on the supplier, against €540-590/mt CFR last week. According to sources, apart from a few deals for ex-India HRC at €545-555/mt CFR, offers directly from Asian mills, including those from Vietnam and Indonesia, have been reported at €540-545/mt CFR southern Europe, while the same materials from traders have been offered at around €570-580/mt CFR. Furthermore, offers for ex-Turkey HRC have been voiced at €550/mt CFR, including duty, down by €10-30/mt week on week.
In Vietnam, at the beginning of the week, prices for ex-China Q235/SS400 HRC in the Vietnamese market decreased to $450-455/mt CFR, down by $15/mt week on week. However, given the quite strong recovery of HRC futures prices in China during this week, Chinese exporters have increased their offers to $460-465/mt CFR by Friday, September 13, while a few traders have already reported offers at $468/mt CFR. Meanwhile, the SteelOrbis reference price for imported SAE1006 HRC has moved to $475-480/mt CFR, from $470-475/mt CFR at the beginning of this week and from $480/mt CFR at the end of last week. At the same time, although import HRC prices have indicated new rebounds by the end of this week, given the steady rise in HRC futures prices in China this week, Vietnamese steel producer Formosa Ha Tinh (FHS) has announced new local HRC prices for October-November shipment higher by only $3-4/mt compared to its previously revised price. Thus, FHS’ prices for non-skin passed SAE1006 and SS400 HRC in the local market for September shipment have settled at $514-528/mt CIF, depending on the size of the order.
In Turkey, ex-China HRC import prices have continued fluctuating, based on the futures situation in China, while customers have been cautious as regards restocking, aiming to see a clearer market picture. Within the week, Chinese HRC prices increased in two steps from $480-490/mt CFR to $500-503/mt CFR for late October-November shipments. No deals have been reported, but a few negotiations were underway specifically for pipe projects. Domestic HRC prices in Turkey have remained stable, with most offers voiced at $580-590/mt ex-works base. Higher levels are also considered to be available for small tonnages and short lead times, while $570/mt CFR should also be achievable for large lots. As regards exports, the declining European market and the weak demand in Europe in general have been putting pressure on Turkish mills. While their offers have remained at $570-585/mt FOB, the bids from potential buyers, while rare, are still much lower than those levels. Overall, market players do not expect much demand for exports and support for prices in the short run, while in the domestic market some demand may be seen from re-rollers since some of them have been delaying restocking for a while now. Still, no boom is foreseen since coated and CRC producers have been working at reduced capacity utilization rates.
In the UAE, since local demand is still low and Chinese hot rolled coil (HRC) offers are volatile, there has been no movement in imports of HRC. Chinese suppliers have dropped their October shipment offers to the UAE to $490-510/mt CFR, from $500-515/mt CFR before. Meanwhile, Japanese suppliers have kept their offers stable week on week at $500/mt CFR for October shipment. At the same time, given the persistent slowness of trading in the GCC, suppliers from South Korea and India are still not giving offers to the region.