Ex-China HRC prices have kept declining amid the slump in local and futures prices in China, affecting not only the mood in Asia but also the mood in the global market. Specifically, given the continuous decline in ex-China prices, local Turkish HRC prices have softened and are expected to indicate a further slight weakening under pressure from buyers. Meanwhile, Emirati HRC buyers have been slow to purchase as import offers have followed a soft trend. At the same time, local European HRC prices have mostly moved sideways, though minimal interest has been seen in imports.
Following a significant decline in ex-China HRC prices last week, this week offers from most mills and traders in China have continued to show downward movement given that average HRC prices in the Chinese domestic market have moved down further due to decreasing HRC futures prices. More specifically, export offers for boron-added SS400 HRC from large Chinese mills have settled at $500-520/mt FOB, with a midpoint at $510/mt FOB, down by $10/mt week on week. At the same time, offers from Chinese traders for SS400/Q235 HRC have been estimated at $490-510/mt FOB, against $500-510/mt FOB last week. Offers for ex-China Q195 HRC in Turkey have been estimated at $540-545/mt CFR, compared to $555-560/mt CFR last week, though by the end of the week talk about offers at as low as $525/mt CFR has been heard in Turkey.
As of October 24, HRC futures at the Shanghai Futures Exchange are standing at RMB 3,483/mt ($489/mt), decreasing by RMB 104/mt ($15/mt) week on week, while up 0.20 percent compared to the previous trading day, October 23.
This week, most Indian HRC suppliers have decided to maintain their export prices relatively stable despite the growing pressure coming from the sharp price drops in China. Besides, local demand has also failed to pick up despite the current festival season in India, putting additional pressure on Indian HRC mills. Specifically, ex-India HRC prices have been voiced at $525-565/mt FOB, against $535-565/mt FOB last week. Most offers for ex-India HRC in the Middle East are still voiced at around $570/mt CFR, which corresponds to around $530/mt FOB, though this is considered to be “unworkable” given the more attractive offers from Japan at $550/mt CFR and from China at around $540/mt CFR and even lower. Although trade has been extremely limited in the main trade destinations, according to sources, regular deals from Indian HRC mills have been reported in Nepal at $560-570/mt delivered to border, which translates to around $525-530/mt FOB.
Following a significant decline in ex-China HRC prices in Vietnam last week, this week import offers have continued to show a downward correction given the further declines in Chinese domestic HRC prices due to decreasing HRC futures prices. After several deals for ex-China Q235 HRC were reported at $515/mt CFR at the end of last week, down by $15/mt, the material has changed hands at $502-503/mt CFR this week. Meanwhile, by Wednesday, October 23, offers for ex-China Q235 in Vietnam were reported at $500-505/mt CFR, against $515/mt CFR a week earlier and down by $5/mt on the lower end of the range compared to the previous day. In the meantime, offers for ex-China SAE1006 HRC have been estimated at around $520-525/mt CFR for end of November-December shipment, compared to $540/mt CFR last week. Besides, suppliers from Japan have been offering SAE1006 HRC at $540-545/mt CFR Vietnam for December shipment, mainly the same as last week. However, according to sources, only a deal for ex-China SAE1006 HRC is reported to have been signed at $520/mt CFR this week, for a small quantity, while most Vietnamese customers have been refraining from new purchases. The SteelOrbis reference price for import SAE1006 HRC has softened to $520-540/mt CFR, down by $5-20/mt week on week, with the lower end of the range corresponding to the most competitive ex-China offers, while the higher end still reflects tradable prices for ex-Japan HRC.
Local prices from European mills have remained relatively stable over the past week, especially for coils for December delivery, though some bullishness has been reported for offers for January delivery. More specifically, offers from mills in northern Europe have been voiced at €570-580/mt ex-works for December deliveries, though, according to sources, producers are targeting higher prices at €580-600/mt ex-works for January deliveries. At the same time, trade activity has remained limited with several deals still voiced at €550-560/mt ex-works levels, the same as last week. Meanwhile, offers from mills in Italy have been at €570/mt ex-works, up by €20/mt over the past two weeks, mainly for December delivery, though tradable prices have been voiced at €550/mt ex-works, against €540/mt ex-works last week. According to sources, there will likely be a new round of purchases and restocking around mid-November, while, in terms of price, there should not be any changes in the coming weeks, with some improvement likely to seen in December, for February shipment coils. In the import segment, trade activity has remained sluggish, while most import prices have moved sideways or up slightly in a few offers. Offers for ex-Asia HRC have been voiced at €555-575/mt CFR, mainly the same as last week. Offers for ex-Turkey HRC have settled at €590-610/mt CFR, including duty, against €580-590/mt CFR two weeks ago.
In the UAE, while no trading activity has been observed, the majority of import offers for HRC have begun to soften in response to the downward trend seen in Chinese offers. Even though Emirati purchasers have expressed hesitation, some UAE-based re-rollers are reported to be looking to make purchases and are particularly interested in Japanese material. However, because of price fluctuations over the past several weeks, buyers are waiting for greater price certainty. Chinese suppliers are now offering SS400 to the UAE at $530-545/mt CFR, down from $550-570/mt CFR last week. Although the majority of offers have fallen, some Chinese suppliers have tried the previous levels of $550-560/mt CFR to the UAE, but these prices are difficult to achieve given the present market situation. Meanwhile, Japanese suppliers who had been silent as regards offering to the GCC began to offer this week at $550/mt CFR for December shipment. However, South Korean suppliers are still not offering to the GCC since there has been no significant improvement in trade. Meanwhile, Indian suppliers have continued to provide the same prices to the UAE this week, but with greater pricing expectations and no price reductions. Currently, offers from India are at around $570-580/mt CFR.
Turkish HRC prices have slid over the past week in both domestic and export markets, following the weakening of China’s offers and amid weak demand. Local HRC prices in Turkey are now at $615-635/mt ex-works, down $5/mt over the past week. Moreover, additional discounts seem to be applicable for serious buyers. As regards exports, prices have moved down by around $10/mt over the past week to $575-590/mt FOB, while EU buyers have generally been slow in restocking. In the import segment, China’s offers have fallen from $540-545/mt CFR to $525-535/mt CFR and, according to sources, a cargo was booked this week at the lower end of the range. Other origins are on offer at much higher levels, which are not considered so workable at the moment. Egypt is offering at $620/mt CFR, while South Korea and India are offering at $585/mt CFR and $600/mt CFR, respectively.