Posted on 31 Aug 2020
The CIS hot-rolled coil export market is described as solid by market participants despite very few sales this week. Mills with availability have increased offers further, and longer lead times enable them to wait for further solidication, towards which all signs are pointing, participants tell Kallanish.
Only one Russian producer is in the market, with indications of equivalent of $480-485/tonne fob Black Sea for small coils of October rolling to buyers in Vietnam, but shipped from Vladivostok. This price is said to be workable already in one of the largest Russian coil destinations, as demand is returning after weeks of idleness, but only for very large volumes and Far East ports shipment, due to difference in lead times and freight cost.
The mill is also ready to sell to Turkey at $510-515/t cfr for small coil, netting back to $500-505/t fob Black Sea depending on the volume, but Turkish buyers are opting for domestic supply. Ukrainian offers to Turkey at $515-520/t cfr have so far met the same fate. A trader bid at $480/t fob for a large volume of Ukrainian HRC for southeast Asia was declined by the seller this week.
As Russian and CIS domestic market continues to recover after Covid-19 inflicted restrictions, another two Russian mills are not offering in the Black Sea market. The ex-Baltic shipping mill has some volume for Northern Europe, while another supplier with traditionally low HRC volumes in the export market was heard selling to Turkey at around $500/t cfr last week, and lifting its indications now to around $520/t cfr for October rolling coils.
Rising demand in the Gulf Cooperation Council (GCC) countries and North Africa is also adding impetus to the strength of Black Sea HRC market. Not a single source expects softening in September, despite China's rain season approaching, and recent price correction driving Chinese HRC to export markets. Iron ore, scrap and slab price strength is adding support to Black Sea HRC market.
Source:Kallanish
