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Asian HRC, Southeast Asian slab drops; Russian, Indian offers compete

Thursday, 30 September 2021

The Asian HRC and slab markets were marked with a bearish sentiment Sept. 30, on the last day of trading before China-based market participants leave for holidays, and as several sell-side indications fell.

S&P Global Platts assessed SS400 HRC 3 mm thick at $925/mt FOB China, up $1/mt day on day. On a CFR Southeast Asia basis, the same grade of coil was assessed at $857/mt, down $1/mt from the previous day.

In China, trading activity remained lukewarm as some market participants began to leave the market for the long holidays Oct. 1-7.

“But the outlook for the spot steel market after the holidays is relatively positive now, given the accelerating output cuts and falling inventory, especially for rebar,” said a Shanghai-based trader.

“The mills in China are not full with orders so the prices may become softer. Big mills would not be able to export with their own name because of government restrictions, so trader exports may rise,” a South Korean trader said. “Long prices will keep the flat prices from falling but till when?”

In Shanghai, the spot price of Q235 5.5 mm HRC was assessed at Yuan 5,770/mt ($892.58/mt) ex-stock including value added tax, up Yuan 20/mt on the day. On the Shanghai Futures Exchange, the most actively traded January 2022 contract closed at Yuan 5,713/mt, up Yuan 16/mt, or 0.3%.

Separately, Platts assessed SAE1006 HRC at $952/mt FOB China, down $1/mt on the day. On a CFR Southeast Asia basis, the same grade of coil was assessed at $868/mt, down $3/mt over the same period.

After Russia’s MMK booked 120,000 mt HRC at $850/mt CFR Vietnam for December shipment during the week started Sept. 19, the mill was heard to have booked 30,000 mt HRC at $855/mt CFR Vietnam for January shipment in the week started Sept. 26. At the same time, another trader was heard inviting bids at $845/mt CFR Vietnam. Given the pressure from the Russian side, Indian mills were also seen showing proclivity to reduce offers further to $880/mt CFR for November shipment, even though bids remained absent.

“Assuming current Indian domestic price is maintained with $850-$860/mt FOB level, Indian mills’ offer price should be maintained at $890-$900/mt CFR ASEAN, at least for November shipment,” a Japanese trader said. “I hope the market will pick up from December shipment. As for Russian, I’m just wondering how they will move.”

“I think mills are pricing both Middle East and Vietnam independently ...Vietnam is benchmarked more with MMK price today and India should get plus $20/mt premium over MMK,” a Dubai-based trader said.

Separately, Platts assessed monthly prices of SAE1008, SAE1006 or equivalent grade base slab at $735-$745/mt CFR Southeast Asia, implying a midpoint of $740/mt, lower $25/mt from August.

Sell-side sources diverted attention to the Chinese market given continued muted buy-side indications from Southeast Asia. According to sources, India’s JSPL booked 40,000-50,000 mt slab at $760-$770/mt CFR China for November shipment in the week started Sept. 13. Thereafter, Russia’s NLMK booked 50,000 mt of slab at $735/mt CFR China for November shipment in the week started Sept. 20. In the week started Sept. 26, Russia’s Evraz was heard offering slab at $760/mt CFR China for November-December shipment. Meanwhile, Indonesia’s Dexin also continued to offer at $735/mt CFR China.

Competition between Iranian, Indian, Indonesian and CIS slabs came to light, with attractive offers from sellers. India’s Uttam Value Steel was heard offering $740-$750/mt CFR Indonesia, Steel Authority of India Ltd. was offering $750/mt CFR Indonesia, Indonesia’s Dexin was offering $740-$750/mt CFR Southeast Asia while Iranian offers stood at $750/mt CFR Malaysia, according to sources.

Vietnam’s Formosa Ha Tinh Steel was heard to have booked 20,000-30,000 mt slab with its parent company China Steel Corp. in September at $760-$770 FOB Son Duong.

-- Ashima Tyagi, Staff

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