Ex-China HRC prices from mills have been relatively stable this week. While at the beginning of the week the mood among traders improved due to the recovery of futures prices in China, any euphoria did not last long as by the middle of the week HRC futures prices started to decline once again, affecting the mood globally. As a result, Vietnam’s HRC import prices have been lacking clarity due to the fluctuations of ex-China prices, while import HRC prices for Turkey have slumped again this week, though market sentiments in the country remain mixed. Furthermore, the outlook for HRC prices in Europe after the summer break is mixed as well, with a number of sources expecting local prices to rise in late August and early September as European customers may focus on domestic purchases due to anticipated restrictions of import HRC inflow.
At the beginning of the week, better sentiments were mounting among Chinese HRC exporters, traders and small mills, mainly on the back of higher HRC futures prices. However, most Chinese mills have kept their offers fairly stable over the past week. Specifically, offers from big Chinese mills for boron-added SS400 HRC have stayed at $495-505/mt FOB, with a midpoint at $500/mt FOB, the same as last week, while a number of large mills have been officially offering their materials at around $515-520/mt FOB. Meanwhile, offers from smaller mills have been voiced at $490/mt FOB, against $480-490/mt FOB last week. At the same time, offers from Chinese traders have returned to the levels reported two weeks ago, to $485-500/mt FOB, up by $10-12/mt week on week. According to sources, this week sizable lots for ex-China SS400 from one of the major steel mills have been sold to Vietnam, Pakistan and the Middle East at $485/mt FOB. At the same time, the demand for local HRC in China has remained slack, while steelmakers have implemented maintenance works to reduce output and bolster prices. Inventory of HRC has decreased gradually, exerting a positive impact on market sentiments. However, the hot weather conditions have continued, negatively affecting the HRC market. At the same time, this week the Chinese yuan has risen to its strongest level in five months, partly due to the domestic economic recovery as well as continued capital inflows.
In Vietnam, import HRC trade has remained limited this week as most customers are expecting more clarity over the price direction given continuous ups and downs in ex-China HRC prices. Specifically, following some recovery in HRC futures prices in China at the beginning of the week, new offers for ex-China Q235/SS400 HRC increased by $15/mt since the end of last week, reaching $500/mt CFR for September-October shipment. However, by the middle of the week as HRC futures prices slumped again, new prices from Chinese traders have been voiced at $495/mt CFR and some at even $490/mt CFR. According to sources, following several deals for at least 10,000-15,000 mt in total signed at $485-488/mt CFR last week, this week several bookings for small tonnages have been reported at $490/mt CFR. In the SAE1006 HRC segment, most offers from Chinese traders have been reported at $510/mt CFR, against $506-510/mt CFR at the end of last week, while offers from first-tier Chinese mills have been estimated at $515-520/mt CFR, up by $5/mt on the higher end of the range week on week. Thus, The SteelOrbis reference price for imported SAE1006 HRC has risen to $510-515/mt CFR, versus $506-515/mt CFR at the end of last week.
Ex-India hot rolled coil (HRC) prices have been mostly kept stable in the past week, but large mills have continued to refrain from submitting offers across Southeast Asia, the Middle East and Europe in face of stiff competition and have instead focused on pushing higher volumes in the local market. In particular, ex-India HRC prices have settled at $560-590/mt FOB, versus $560-585/mt FOB last week, while stray bids have been heard at low levels of $520-530/mt FOB for small lots. At the same time, more tension has been mounting in the global market given the recent news over new anti-dumping investigations in the EU and Vietnam against Indian HRC.
In Turkey, the announcement of the preliminary antidumping rates against China, India, Japan, and Russia has been the news of the week. The duties, which are in the range of 11.65-57.75 percent depending on the country and the producer, are not in force yet and so there is no immediate influence on the market and prices. According to sources, there will be a hearing on the matter on August 20, with the definitive measure possibly being announced in the second half of September. Most market players believe there will be no influence on Turkey’s purchases, even if the announced duties are at high levels. The main reason is the inward processing regime, which allows Turkish mills to avoid paying import taxes if they export their finished products. However, it is believed that HRC importers in any case will be forced to be more careful with their export licenses. Moreover, there is talk in the market that the government may change the conditions of the inward processing regime, but the details are not clear yet. In the meantime, Turkish HRC producers have been trying to raise their domestic prices to $580-585/mt ex-works and the level of $570/mt ex-works is not available now. In the import segment, Chinese HRC has settled at $520-530/mt CFR for Q195 of 3 mm and higher, versus $525/mt CFR seen late last week.
In the UAE, with the decreased offers in previous weeks, particularly from China, Emirati purchasers acquired some lots. But not much activity had been observed this week as Chinese traders have attempted to raise offers. Currently, the majority of Chinese suppliers are offering SS400 at around $530-535/mt CFR, unchanged from last week, while traders prefer to offer at around $540/mt CFR. Meanwhile, the last deal to the UAE was concluded last week at $520/mt CFR for shipment in September. Similarly, Japanese suppliers have begun to offer somewhat higher levels, with quotes this week at $560/mt CFR for September shipments to the UAE. However, suppliers from South Korea and India are still not providing HRC to the UAE since trading activities still remain slow in the UAE market.
In Europe, while HRC offers for September delivery from mills in northern Europe have this week been estimated at €620-650/mt ex-works, mainly the same as last week, mills in Italy have been out of the market amid their summer maintenance works. Meanwhile, the tradable prices in the EU region have been assessed at €600-620/mt ex-works for September delivery, against €610-620/mt ex-works last week. At the same time, the outlook for HRC prices after the summer break is mixed, with a number of sources expecting local prices to rise in late August and early September as European customers may focus on domestic purchases due to anticipated restrictions on import HRC inflow. According to sources, European mills are likely to increase their offers for October-November deliveries given the traditionally higher restocking after August, as well as amid complications with import supply due to new safeguard measures coupled with the recently announced antidumping investigation against HRC from India, Egypt, Japan and Vietnam. In the import segment, most offers have settled at around €560-600/mt CFR, for September-October shipments, mainly the same as last week.