The first week of September started on a rather negative note, with ex-China HRC offers decreasing to all main trade destinations as the uptrend of prices turned out to be short-lived. Meanwhile, other Asian suppliers were bearish as well. While local Indian HRC prices have fallen further amid inventory and import pressures, Indian HRC exporters have been forced to decrease their prices, though the decline was not enough to drive trade. Besides, Vietnamese HRC producer Hoa Phat cut its HRC prices given the ongoing pressure from imports. Furthermore, Japanese HRC mills have been pushing their volumes at discounts globally, with the most interest seen in the Middle East in particular. Turkish HRC producers have remained fairly solid in their domestic offers, though new ex-China HRC offers have been reported down at least $10/mt compared to early this week. In the meantime, the mood in the domestic and import HRC markets in the EU remains poor amid delayed restocking.
Ex-China HRC prices from smaller mills and from a number of traders have shown some negative bias affected by fluctuations in local and futures HRC prices. Offers from big mills for boron-added SS400 HRC have settled at $460-475/mt FOB, with a midpoint at $467.5/mt FOB, mainly the same as at the end of last week, and up by $2.5/mt week on week. However, by Friday, September 6, offers from smaller mills and most traders have been estimated at $445-460/mt FOB, down $5-15/mt week on week. At the beginning of the week, offers for ex-China Q235/SS400 HRC through traders in Vietnam have settled at $465-468/mt CFR, against $473-475/mt CFR last week, though by the end of the week most offers have dropped to $462-465/mt CFR levels. Besides, offers for ex-China SS400 HRC to Pakistan have been voiced at $490/mt CFR, down by $10/mt week on week. Furthermore, while at the beginning of the week, offers for ex-China Q195 and SS400 HRC in Turkey were at $500-505/mt CFR, down by $5/mt week on week, by Friday most offer prices have declined to $485-492/mt CFR. As of September 5, HRC futures at Shanghai Futures Exchange were standing at RMB 3,126/mt ($440/mt), decreasing by RMB 185/mt ($26.0/mt) or 5.6 percent since August 29, while down 2.16 percent compared to the previous trading day, September 4.
Ex-India HRC indicative offer prices have shown a slight decline this week, standing at $550-565/mt FOB, against $560-580/mt FOB last week, even though most mills have continued not to submit offers as buyers in the Middle East and Asia have been finding alternative cheaper sources, while the situation in Europe has continued to remain uncertain amid antidumping investigations and low business activity after the summer holidays. Offers for ex-India HRC have been voiced in southern Europe at $600-620/mt CFR, which translates to around €540-560/mt CFR, being the most competitive among other foreign suppliers to the region. However, given the recent announcement of the antidumping investigation in Europe against ex-India HRC, interest in Indian coils has been minimal.
In Vietnam, local HRC producer Hoa Phat Group has announced its new local HRC prices for October- November shipment, cutting them by around $10/mt on average from the previous month. Specifically, on September 4, Hoa Phat’s prices for non-skin-passed SAE1006 and SS400 HRC for October and November shipment have been announced at VND 12,840-12,870/kg ($515-518/mt) CIF. The decision is attributed to the extremely slow demand in the country and is in line with market sources’ expectations. Besides, since import quotations, for ex-China HRC in particular, have shown another slight decrease this week, the mood among most Vietnamese buyers has remained negative so far. By the end of the week, the SteelOrbis reference price for import SAE1006 HRC has moved to $480/mt CFR for October shipment, from $485/mt CFR at the beginning of the week and from $485-490/mt CFR last week, based mainly on offers for ex-China SAE1006 HRC.
Japanese HRC mills have been pushing volumes at discounts globally during the past weeks. According to sources, several deals are reported to have been signed in the first week of September at $500/mt CFR Bangladesh and at $505/mt CFR Nepal, and so deal prices have lost more than $50/mt month on month. Furthermore, following several deals for ex-Japan HRC in Pakistan at $530/mt CFR in late August, this week market insiders expect new deal prices at a maximum of $500/mt CFR. Furthermore, one of the Japanese HRC producers is reported to have sold around 23,000 mt of HRC at $500/mt CFR to the UAE and around 7,000-10,000 mt of HRC in Saudi Arabia also at around $500/mt CFR. Thus, ex-Japan HRC prices to the Middle East have declined by around $50/mt month on month.
Business activity in the European HRC market has remained weak even though European mills have mostly returned from the summer holidays. At the same time, local mills have failed to increase their offers since most buyers keep postponing new bookings due to the ongoing slowness of demand and the uncertainty over the direction of prices, coupled with the sufficient stocks of most service centers who are aiming to reduce them. More specifically, offer prices for HRC are evaluated at €590-600/mt ex-works, the same as last week, both in Italy and northern Europe, with the higher end of the range corresponding to indicative offers from mills, while the tradable prices have been estimated at €590-600/mt ex-works in the north and at €590/mt ex-works and even slightly below in Italy. At the same time, in the import segment trade has continued to be sluggish this week as well, due to safeguard and antidumping-related risks and slow demand. Import prices have been voiced at €540-590/mt CFR, depending on the supplier, down by €20/mt on the lower end of the range week on week.
In Turkey, HRC prices in the domestic market have remained unchanged over the past week at $580-600/mt ex-works in offers, but the level of $570/mt ex-works is considered workable by some suppliers. Demand is still insufficient and some restocking had been done on the import side starting from late August, but this time from Egypt, not from China. According to sources, several buyers from Turkey have booked a total of at least 50,000 mt of HRC from Egypt at around $570/mt CFR for October shipment, taking advantage of the lower extras compared to local Turkish mills and the shorter lead times compared to ex-Asia cargoes. In the meantime, Chinese HRC offers have declined again, in two steps, following a short-lived rebound, from $500-510/mt CFR first to $485-493/mt CFR and then, most recently, to $480-490/mt CFR. The prices are indicated for Q195 material, 3 mm and higher, and for large volumes. A couple of weeks ago, several deals were concluded for Chinese material for pipe projects and, reportedly, to one Turkish re-roller. However, most Turkish coated steel producers have not booked enough tonnages. Still, many market players evaluate such a situation as not entailing a huge amount of delayed demand since the re-rollers are most probably working at reduced capacities due to the low demand for their products.
In the GCC, some interest in Japanese HRC has been seen, even though Chinese suppliers have begun to reduce their offer prices compared to the previous week. As a result, Japanese suppliers sold around 23,000 mt of HRC to the UAE and 7,000-10,000 mt to Saudi Arabia for shipment in October at $500/mt CFR. Meanwhile, Chinese suppliers, witnessing a drop in futures prices, reduced their offers to $500-515/mt CFR for October shipment, down from $500-520/mt CFR last week. However, due to sluggish business activities, particularly in the UAE, Indian and South Korean suppliers are still not giving offers to the region, as in previous weeks.