Posted on 19 Jan 2021
CIS hot rolled coil exporters have adjusted down offers for some destinations, as pre-Lunar New Year market developments in China have seen the country offer greater HRC export tonnages at highly competitive prices.
A major Russian supplier reduced its offers for the Turkish market to around $750/tonne fob Black Sea ($765/t cfr Turkey) late last week, having offered at up to $785/t fob just a week earlier. The reduction looked logical in the context of Chinese offers to Turkey at $740-750/t cfr, slightly up on a week prior, and short traders' offers at $680-690/t cfr Turkey.
Turkish re-rollers and processors bought considerable quantities of Chinese HRC at $730-740/t cfr in the first working week of January, with more trade expected this week, Kallanish understands.
Another producer has also softened its offers to Turkey to around $765-770/t fob for April-rolling material late last week, but concluded no bookings. Offers to other regions have also been indicated to have softened to these levels. However, considering Turkish prices are usually the highest, "…more reductions are needed in order to entice MENA buyers," one trader confirms.
Although demand is bubbling up, there is a resistance to pay offer prices, as they shot up by around $60/t in the past month, based on European demand and price growth. Although a significant part of traditional CIS coil importing markets continues to rebuild post-lockdown economic and industrial activity, financing remains an issue everywhere. This is constraining buyers' ability to restock, "…possibly for the best", another trader adds, referring to ongoing volatility, lately delivered by China's renewed exports.
Chinese exports are here to stay, as the country returned to higher output volumes, forcing the correction. Very few participants expect it to be a major one, but admit it was expected. The European market, however, remains on the ascending curve, with Covid-19 not affecting the dynamic, sources say.
Cold rolled coil offers remain at $910-920/t fob Black Sea, with some bookings made in Turkey. Demand here for March-produced CRC from Russia is high due to domestic prices exceeding imports by up to $100/t. Relatively limited availability of CRC is also supportive.
Source:Kallanish
