CIS HRC sellers’ lower offers bag sales

Posted on 13 October 2020

CIS hot rolled coil export prices have softened in line with previous expectations. The longer-than-usual Golden Week holidays in China placed many buyers on the fence, while the seasonal slowdown is also taking its toll. Availability is ample, unlike earlier in the year, Kallanish hears from sources.

Having held offers at $505-515/tonne fob Black Sea for several weeks in September, CIS suppliers have reduced them to $475-495/t fob, depending on the producer and tonnage. They have pocketed large volume of sales to Turkey already. Two Russian mills sold large volumes at $495-510/t cfr Turkey for December/January loading. A Ukrainian supplier achieved $495-500/t cfr Turkey, sources say, all netting back to the offer levels.

One Russian supplier was also seen offering to Latin America at $475/t fob, indicating its willingness to negotiate down for large volumes, a trader says. The supplier has the advantage of offering high-quality material from its newly commissioned rolling mill, at highly competitive prices, he adds. Sellers appear to be offering in a very wide range, as Ukrainian offers to Saudi Arabia were heard at $535/t cfr and to Egypt at $500/t cfr, netting back to approximately $495-470/t fob.

Sellers' move to close sales at lower prices rather than wait for China's return surprised some traders, but indicated increasing availability, as domestic markets are not performing as well as was expected. Russian domestic buyers of HRC are not accepting new higher offers for now, as Covid-19 restrictions continue to affect planning and buying, while renewed restrictions are instilling a negative mood, sources say.

Besides, lower offers are allowing traders to engage, with some sales heard last week, injecting more energy into the lacklustre market. Expectations are for a mild fourth quarter, but sources do not expect offers below $470/t fob in this round of sales. Eyes remain on China as it comes out of extended holidays to set the direction for Q4.

Source : Kallanish