Posted on 29 Oct 2019
Prices of hot rolled coil from CIS producers have not changed much during past week, indicating they may be consolidating for the first time since mid-July. This was when they started their descent from around $500/tonne fob to the current level of around $367.50/t fob, according to Kallanish records.
"The HRC market appears to have hit the floor. There is nowhere to fall anymore - at least for the majority of producers - we are at cost levels, so considering we are coming up to end of year breaks and maintenances, I doubt we shall see any more prices sacrifices," a major flat market participant says.
Demand appears to remain unchanged and lacklustre. Slightly more enquiries are coming from North Africa however, where CIS mills are competing with Turkish suppliers, but where they do not have preferential trading terms, as Turkey does. Enquiries from Egypt are at around $385-390/t cfr, traders say, but due to long lead-times and export duty, and the small volume of orders, local buyers prefer Turkish material. This ends up costing around $415-420/t cfr in the last week, but arrives much quicker.
Low demand levels are matched with a low level of supply, as November rolling/December shipment order books are closed. The ex-Baltic shipping mill continues to supply small/medium lots to its traditional European destinations, with central Europe offers heard at below €430/t ($477/t) cpt. This is "… low enough to keep buyers interested, but not too low for the mill to continue selling at this level," a European source says.
There have been talks of Russian material sold to China, but this could not be confirmed with any seller. Chinese buyers sought thin-gauge material with relatively prompt shipment which Indian and other regional suppliers could have supplied. It would have been difficult, however, to source enough Russian material of the appropriate specification and delivery time from Russia at this juncture, several traders note.
