At the beginning of the week, ex-China HRC prices from traders increased after the holiday, though within a few days the euphoria disappeared together with the fall in ex-China HRC prices following the drop in futures prices, as China failed to deliver details of its stimulus measures. Other suppliers have been confused and, even though some Asian mills like Vietnam’s Formosa hiked their local HRC prices, the increases were moderate, while import activity failed to intensify given the unclear price trend. Meanwhile, Turkey saw a decline in China’s HRC import offers, though Turkish domestic prices increased. Besides, at the end of the current week, Turkey has announced the definitive decision in its antidumping investigation against HRC imports from India, China, Russia and Japan, imposing duties on the countries in question. HRC prices in Europe have remined relatively stable amid slow trade, though mills target increases for December delivery.
Following the return of Chinese suppliers to the market on quite a positive note at the beginning of this week, by Wednesday, October 9, the market showed a sharp drop amid the decline in HRC futures prices as China’s National Development and Reform Commission (NDRC) disappointed investors by withholding major new stimulus measures, despite expressing confidence in meeting the country’s economic targets for the year. More specifically, export offers for boron-added SS400 HRC from large Chinese mills have been voiced at $530-545/mt FOB, with a midpoint at $537.5/mt FOB, up by $7.5/mt since the last official offers on September 30, but down by $10/mt as compared to indicative offers on Tuesday, October 7. Meanwhile, offers from smaller mills have been voiced at $516-530/mt FOB, against $535-545/mt FOB yesterday, with the lower end of the range corresponding to offers from a Chinese supplier, Anfeng Steel. Meanwhile, the tradable prices for ex-China SS400/Q235 HRC have been estimated at $516-525/mt FOB, versus $535-550/mt FOB yesterday and $520-540/mt FOB two weeks ago. The lower end of the range corresponds to ex-China Q235/SS400 HRC offers to Vietnam at around $530/mt CFR, down by $20-25/mt since the beginning of the week, while welcome bids have been reported at $520/mt CFR. Furthermore, according to market insiders, offers for ex-China Q195 HRC have decreased to $560-565/mt CFR levels in Turkey, versus $585-590/mt CFR. Domestic HRC prices in China have settled at RMB 3,640-3,710/mt ($515-525/mt) ex-warehouse on October 11, with the average price level RMB 185/mt ($26/mt) lower compared to that recorded on October 8, according to SteelOrbis’ data. As of October 11, HRC futures at Shanghai Futures Exchange are standing at RMB 3,599/mt ($509/mt), increasing by 0.62 percent compared to the previous trading day October 10.
Ex-India hot rolled coil (HRC) prices have been maintained relatively unchanged at $540-550/mt FOB, with sellers taking a more optimistic stance following the hardening of global prices led by China, but actual trade activity has continued to remain absent owing to geopolitical uncertainties in the Middle East and with buyers in Europe waiting for the final outcome of antidumping investigations. According to market insiders, there were rumors of ex-India HRC offers at around $540/mt CFR UAE, but no seller confirmed this information, as the lowest levels have been voiced at $530-540/mt FOB. As for Europe, sources at mills pointed out that, with mills increasing prices, distributors are increasingly looking at imports. But deals are being held back by both sellers and buyers until November when some clarity will emerge regarding whether a provisional antidumping levy will be imposed or not. By the end of the week, offers for ex-India HRC in southern Europe have been reported at around $610/mt CFR, or around $560/mt FOB, up by $10/mt week on week, though no deals have been reported so far.
This week, major Vietnamese producer Formosa Ha Tinh Steel (FHS) started to announce its new HRC prices for the local market, increasing them by $22-26/mt compared to September, even slightly less than had been expected by some market sources, since, despite the new ex-China HRC prices hikes, sentiment has been rather uncertain over the future price trend in China. Specifically, FHS’s new offers for non-skin passed SAE1006 and SS400 HRC in the local market for December shipment mainly are reported at $540-550/mt CIF, while skin-passed SAE1006 HRC has been offered at around $545-555/mt CIF. Meanwhile in the import segment, offers for ex-China Q235/SS400 HRC to Vietnam have been voiced at around $530/mt CFR, down by $20-25/mt since the beginning of the week, while welcome bids have been reported at $520/mt CFR. Although no firm offers have been heard for ex-China SAE1006 HRC, the SteelOrbis reference price has moved to $545-550/mt CFR, against $570/mt CFR at the beginning of the week and versus $520-550/mt CFR last week.
Turkish HRC buyers have been mainly just watching market developments this week, following China’s return from its holiday. Chinese suppliers opened up with offers at $585/mt CFR, up from $560-570/mt CFR before the holiday. However, a day later the indications rolled back to $560/mt CFR and even lower levels were considered possible. As of today, Chinese HRC offers stand at 552-555$/mt CFR Turkey. In the meantime, Russian HRC mills became active in exports. In fact, MMK, which had not been exporting for almost two years, has offered at $520/mt CFR for November shipment HRC, while Severstal was indicating $530/mt CFR to the Middle East. However, the price idea of Turkish buyers is closer to $515/mt CFR and there is not much demand, and so the supplier preferred to sell to North Africa, around 30,000 mt. At the end of the current week, Turkey announced its definitive decision in its antidumping investigation against HRC imports from India, China, Russia and Japan, imposing duty rates at 6.1-43.31 percent depending on the supplier, which is considered high. The duties will be adding to the existing restrictions (13-15 percent import tax on HRC), but, as usual, will not be paid under the country’s inward processing regime.
In the UAE, while Chinese HRC prices have fluctuated but remain high, other suppliers have begun to supply to the UAE or intend to increase their offers. Meanwhile, even though local demand in the UAE remains slow, some buyers in need of stocks have purchased lots from India in the past few weeks. According to sources, Emirati purchasers bought around 10,000-13,000 mt of HRC from India 10 days ago at $520/mt CFR, but this information has not been confirmed and official offers for this origin are currently reported at $540-550/mt FOB. On the other hand, Chinese SS400 prices have fluctuated this week, with offers ranging from $580-600/mt CFR at the start of the week to $550-570/mt CFR at the end of the week. Nonetheless, Japanese suppliers have not yet submitted fresh offers this week, their offers previously having been at $520/mt CFR, whereas South Korea is still not offering to the UAE.
In Europe, despite the significant rise in HRC offers for European customers announced by ArcelorMittal last week, this week the range of domestic coil offer prices from other mills has remained mostly unchanged for November delivery, given the lack of demand in the region. More specifically, offers from mills have remained relatively unchanged at €560-570/mt ex-works northern Europe for November and December deliveries, while offers in Italy have been at €540-550/mt ex-works for delivery in November. At the same time, tradable prices have been voiced at €550/mt ex-works in the north, but, according to sources, mills are aiming at €560/mt ex-works and higher for first quarter orders. Furthermore, workable prices in Italy have been heard at €530-550/mt ex-works, against €540/mt ex-works last week. However, market insiders have been actively discussing a possible increase in prices by at least €20/mt for deliveries in December and later, though the sustainability of significant upward price movements is still doubtful as real demand has remained slow. In the import segment, trade has remained extremely slow as buyers have been refraining from new purchases due to risks related to safeguard quotas and antidumping duties. At the same time, most import offers have increased over the past week, reaching €565-575/mt CFR for ex-Asia HRC, from Vietnam, Taiwan and Japan in particular, up by €5-10/mt week on week. Besides, according to sources, following a deal for ex-India HRC signed at $605-610/mt CFR last week, or around €553-557/mt CFR, new offers for ex-India HRC have been estimated at €580/mt CFR through traders, though such a level is considered to be unworkable.