The current business week in the global HRC market started with sharp increase in prices from China supported by the announcement of stimulus packages in the country. The price hikes announced right before the holiday in China were rather surprising, with HRC export prices up by more than $50/mt. Meanwhile, the mood among other Asian HRC suppliers was varying from seller to seller, with offers from a Vietnamese mill increasing by more than $30/mt, while ex-India HRC prices have remained unchanged so far. Furthermore, market sentiments have also improved in Europe following the announcement of price hikes by leading European producer ArcelorMittal.
Export offers for Chinese HRC both from traders and mills increased significantly on Monday, September 30, the last working day before the long holiday (October 1-7) amid sharp rises in local and futures HRC prices following the announcement of stimulus measures in China. More specifically, offers for boron-added SS400 HRC from big Chinese mills have been estimated at $520-540/mt FOB for November shipment, with a midpoint at $530/mt FOB, or up by $57.5/mt since the end of last week. Meanwhile, tradable prices for ex-China SS400 and Q235 HRC have been estimated at $520-530/mt FOB, compared to $470-475/mt FOB. In particular, offers for ex-China Q235 HRC have been voiced at $540-545/mt CFR, against $490-495/mt CFR at the end of last week, while offers for ex-China Q195 have been heard at $535/mt CFR, up by $50/mt week on week.
Ex-India HRC prices have been kept unchanged by large mills at $540-550/mt FOB, but the ongoing antidumping investigations in Europe have kept sellers away from submitting bids, while buying interest in the Middle East has been slightly better but deals have failed to materialize owing to geopolitical reasons in the region and competitive alternatives. Offers for ex-India HRC in Europe have been voiced at $590-595/mt CFR, according to sources, while the problem is that no EU customers want December arrivals since from January a provisional antidumping duty is expected to be announced. Meanwhile, according to market insiders, Indian mills have also been trying to book all available export orders to Nepal at $570-580 delivered to the border and to the Middle East also at a similar level, which means around $540-550/mt FOB.
In Vietnam, Vietnamese producer Hoa Phat Group has announced its new local prices for HRC for December shipment on October 1, hiking them by more than $30/mt month on month given the positive sentiments in terms of the price trend among market players after the recent hikes in ex-China HRC. However, although the higher ex-China HRC import offers for Vietnamese buyers have played a role in setting Hoa Phat’s new prices, most Vietnamese buyers still believe the new levels are too high. In particular, on Monday, before leaving for their holiday, Chinese suppliers offered their SS400/Q235 HRC at around $540-545/mt CFR, against $490-495/mt CFR at the end of last week, while offers for ex-China Q195 have been heard at $535/mt CFR, up by $50/mt week on week. At the same time, the SteelOrbis reference price for imported SAE1006 HRC has moved to $520-550/mt CFR, up by $20-40/mt week on week, with the lower end of the range corresponding to the last ex-Japan HRC offers, while the higher end corresponds to indicative prices for ex-China coils.
Market sentiments have improved in Europe following the announcement of new HRC prices by leading European producer ArcelorMittal, with a number of market insiders expecting mills in the region to follow suit and increase their domestic HRC offers in the short run by at least €25-30/mt. Specifically, this week ArcelorMittal has officially increased its local prices for November delivery by €40/mt to €590/mt base delivered both in northern and southern Europe. In the meantime, trade in the import segment has been extremely sluggish, with most customers refraining from new purchases due to antidumping duty risks and the imposition of blanket import taxes, with bullish sentiments mounting amid the recovery of the Chinese market on the back of stimulus measures. Import offers for ex-Asia HRC directly from mills have been estimated at €535-545/mt CFR, up by €10/mt week on week, while offers through traders have been heard at €560-580/mt CFR. Offers for ex-Turkey HRC have been heard at €580/mt CFR, including duty, through traders, or at around €550/mt CFR directly from mills, while offers for ex-Egypt HRC have been heard at €615/mt CFR, also through traders.
The current week in the Turkish HRC market has started with a $50/mt price increase in ex-China offers, which, on the one hand, puzzled market players, but, on the other hand, gave a boost to market sentiment. Since import offers reached $560-570/mt CFR and higher, Turkish HRC producers decided to take advantage of the situation and raised their indications. As a result, by the end of the week, domestic HRC offers in Turkey have settled at $600-620/mt ex-works and, according to suppliers, local buyers have started restocking at $600-615/mt ex-works depending on the lead time and order size. Local mills are mainly offering for November deliveries in the domestic market and for November-December shipment for exports. Export offers have jumped from $570-590/mt FOB to $590-600/mt FOB, with no deals concluded yet according to sources. Despite the price increase seen in the EU HRC market, buyers are still hesitating to accept the higher prices and the rare bid price ideas from European customers are still below $560/mt FOB. Market players in Turkey, as well as globally, are waiting to see China’s price levels after the holiday. Generally, buyers in Turkey expect China’s offers to roll back by at least $20-30/mt from the latest indications.
In the GCC, as Chinese suppliers hiked their HRC offers dramatically, some customers in need of stocks chose to purchase some lots from Japanese suppliers, buying around 8,000-10,000 mt of HRC from Japan for December shipment at $520/mt CFR. Previously, offers from Japan to the UAE were at $495/mt CFR. Chinese suppliers, on the other hand, who are on holiday and will return next week, hiked their prices sharply, to $560-565/mt CFR, from $490-510/mt CFR last week. Meanwhile, India and South Korea are still not offering to the GCC but, given the market's increasing trend, they may begin to offer to the GCC in the coming weeks.