Posted on 25 May 2021
The CIS hot rolled coil price rise is encountering its first serious countercheck this week since the current upward run started in February. This is on the back of the bearish reaction of China’s hot rolled coil futures and spot markets to the State Council's anti-inflation and speculation meetings. Offers have declined consdierably in both domestic and export markets (see separate article).
Plunging Chinese HRC prices had a sobering effect on ASEAN markets, with buyers rejecting higher-priced offers, and raising concerns over the trend's development this week. Bids at below $1,000/tonne cfr are well below CIS suppliers' price ideas, and should Chinese domestic HRC prices continue to decline, so will the importers' price idea, market sources tell Kallanish.
Although at press time on Monday CIS mills were not heard cutting offers from last week's indications of around $1,100-1,130/t fob, depending on the supplier and the size, demand has cooled towards the end of last week on China's market news. Prior to this, traditional buyers in the Middle East and North Africa were in the market with enquiries, pushing CIS suppliers' expectations upwards. Offers rose by around $30/t on-week last week, as sellers anticipated bookings from MENA and Turkey in addition to European enquiries.
In Turkey, CIS mills are indicating offers at up to $1,180/t cfr maximum, but with late August loading time these tonnages would arrive not before September, in line with domestic Turkish material of the same delivery time, making offers currently unviable. With very few positions in the market due to traders' ongoing struggle with financing, this week is likely to be quiet in the Turkish HRC import market, with buyers observing the market's dynamic, traders note.
MENA importers' price ideas also remain well below offers, despite higher indications, as suppliers increased offers further. Market participants say they expect the established gridlock will continue this week.
Source:Kallanish
