It seems that spike in HRC prices, which was expected in the second half of December, has already turned the corner, with buyers coming under pressure to finalize their requirements before surge.
As a result, the HR market at Black Sea was quite active this week and HRC prices increased by USD 10 per tonne to USD 20 per tonne.
As per information available, steel mills have fulfilled their current order books allowing them to push prices further. The order bookings are reported to have been in the range of USD 580 per tonne to USD 600 per tonne for Ukrainian material.
As per report, producers have already started to contract January production. Ukrainian mills are now offering January production at USD 610 per tonne to USD 620 per tonne while Russian material is being offered at USD 610 per tonne to USD 630 per tonne.
On the other hand, the Chinese mills are also eying a major hike. As per offers floating in the market, HRC from top 10 Chinese mills is in the range of USD 650 per tonne FOB although likely deal levels are likely to be lower.
As the news of price hike in iron ore and coking coal by about 10% in January to March quarter have started percolating, buyers are getting uneasy and striving to secure their needs allowing steel mills to hike their offers.
Some market players see HR prices climbing close to USD 700 per tonne FOB in coming months before coming down to about USD 550 per tonne again by mid or end of Q1.