Posted on 02 Feb 2021
CIS hot rolled coil exporters remain under pressure to reduce offers further to attain sales. This is despite some downward adjustments to their offers, in line with widespread corrections in scrap and finished products prices in major buying regions.
China's decreasing hot rolled coil prices have led to a sudden abundance of lower-priced offers in practically all CIS export markets, including Turkey, where deals are being made at over $50/tonne below CIS offers. Meanwhile, with the correction ongoing in the US scrap market – the weathervane of global scrap sentiment – further reductions are possible, market sources tell Kallanish.
After a major CIS supplier reduced its offers for the Turkish market to around $740/tonne fob Black Sea, Turkish buyer negotiated a purchase of a considerable volume at around $740/t cfr last week. Another supplier continued offering at $750-760/t fob Black Sea to all destinations, with no sales concluded. With Chinese exports available at around $650-660/t fob, just below $700/t cfr Mediterranean ports, more discounts will be needed to compete, sources say.
CIS mills are not in a great hurry to sell, as they are now into April-production/May-loading books, and have some time on their hands to sit out the Lunar New Year holidays in Asia. These traditionally serve as a threshold into a new cycle of buying. CIS domestic demand is satisfactory for the season, but volatility remains, as does the danger of further price declines and global production volumes returning to pre-Covid-19 pandemic levels.
Cold rolled coil offers have only softened marginally, to around $890-910/t fob Black Sea, depending on the mill. As CRC availability is much lower than that of HRC and demand remains high, these volumes are sold promptly when becoming available, sources note.
Source:Kallanish
