HR coil prices in markets such as Europe, Asia and the US all increased due to strong demand and continued supply scarcity. Participants in market transactions predict factories will offer higher prices in the near future.
Across European markets, HR coil price at the end of last week increased simultaneously. Fastmarkets said that hot rolled coil ex-works price in Northern Europe was 1,042 euros / tonne (1,254.34 USD / ton) on May 7, up 2.1% from a day earlier.
This price is up 3.5% from a week earlier and up 16.5% from a month ago.
In the US, the price was 1,497.2 USD / ton (FOB) on 6/5, up 1.04% from the previous day. This steel product has increased by 2.13% from a week ago. The price remained above 1,480 USD / ton for the past 5 consecutive days due to tightening supply.
In Asia, HR coil import prices in Vietnam continue to rise this week due to strong end-user demand. They increased buying because they feared that prices would be higher in the near future.
Indian products were offered for sale at 995 USD / ton (CFR Vietnam) earlier this week, then increased to 1,010 USD / ton at the end of the week. At least 30,000 tonnes of hot rolled coil were sold, Fastmarkets said.
Particularly in China, HR coil price increased in both domestic and export market on 7/5. The market expects demand to increase for the rest of May.
Specifically, the price in Shanghai is 5,990-6,000 yuan / ton (equivalent to 927 - 929 USD / ton), an increase of 80 yuan from a day ago and 230 yuan from a week ago. The price in Tangshan is 5,940 - 5,950 yuan / ton, an increase of 290-320 yuan. Hot rolled coil price in China is currently at its highest level since the material’s futures contract was traded in 2014.
End consumers in eastern China increase their purchases of HR coil to replenish their reserves before the end of the week.
Hot rolled coil prices in particular and steel products in general have increased sharply in recent years mainly due to strong demand and high ore prices.
Mysteel said spot 62% Fe grade iron ore prices reached $ 201.15 / ton on May 6, reaching $ 200 for the first time. Prices in futures contracts in Singapore rose 5.1% to $ 196.40 / ton, the highest since 2013. Prices in Dalian (China) also increased by 8.8%.
According to S&P Global Platts, the spot price of 62% FE ore to China, was at a record high of 202.65 USD / ton on May 6. The price of this raw material has increased by about 27% since the beginning of this year.
Ore prices surged after Beijing announced an indefinite suspension of the China-Australia Strategic Economic Dialogue. Relations between China and Australia deteriorated as China imposed anti-dumping duties on barley and wine originating in Australia, and ordered traders to stop buying products such as copper, sugar, wood and lobster.
Previously, the price of this material kept going up because of the strong global demand for steel in the context of economic recovery. In particular, demand in China exploded when Chinese steel companies maintained production over 1 billion tons a year, despite efforts to control supply and production to limit carbon emissions of the steel industry.
"May is considered the peak season for the construction industry. Meanwhile, the steelmakers’ profit margins are now around 150-200 USD / ton so they want to be able to produce the most, regardless of ore prices. How much is that, "said Julien Hall, director of Asian metals prices at S&P Global Platts.
Meanwhile, the world’s largest mining firms are facing many operational problems, causing tight supplies.
Iron ore prices still have room to rise although prices may fall back in the second half of this year due to improved supplies and slowing demand, according to Fitch Solutions. There is also a risk that China will implement policies to prevent the sharp rise in iron ore prices.
