Despite the fact that demand in the European
flats market is not so strong, producers have recently started to hike their prices in line with the continuing rise seen in
scrap prices. We reported in our previous market analyses that most buyers in
Europe had begun to prefer concluding purchases of material from producers in their domestic markets. In this context, it may be said that the order books of the leading mills in
Europe are full until the end of the third quarter. European producers are currently giving offers for June-August shipments.
As regards the Italian domestic market, Riva Group's offers for
HRC are at €720/mt, its
CRC offers stand at €750/mt, whereas its HDG is at €740/mt. This week the Italian domestic market has been calmer than in previous weeks. It is hard to say that demand, particularly from end-users, is strong in
Italy; however despite this, prices are continuing their uptrend. While both local prices and import offer levels are increasing, buyers are acting hesitantly towards the offers given for June-July shipments, even towards the ones given for September shipment by some producers.
The latest
HRC offers ex-
Iran were standing in the range of €660-670/mt; however, according to a tender finalized this week, currently the price of
HRC stands at €699/mt FOB,
CRC is at €711/mt FOB, whereas PPGI is at €833/mt FOB in the new offers for
Europe. Nevertheless, for the time being the offers in question are considered to be high for
Europe.
Another important issue concerning the
flats market is the export duty increase imposed by
India. Given that mostly HDG material is being exported from
India, it seems the rumors that the export duty on HDG products is to be increased to five percent may influence the market. Although the Indian government has not made any official announcement, as regards deals for June shipments, the Indian traders have already begun efforts to share the tax in question with buyers on a 50-50 basis in order to compensate for the price difference after the implementation of the duty in question.
In the latest Indian offers given to
Italy for small tonnages,
galvanized coils of 0.30 mm thickness with 100 gr/m2 zinc coating stand at the level of €945/mt CFR Ravenna; meanwhile, the offers for 0.50 mm material vary in a range of €870-875/mt CFR Ravenna. Although no sales have been concluded at these prices, it is likely that the prices will mark further rises, on account of the export duty to be imposed by the Indian government.
The latest base prices announced by
ArcelorMittal in the Spanish domestic
flats market were at €650/mt ex-works. Currently,
HRC bookings are concluded in a range of €740-750/mt ex-works for July-August shipments. The buyers in the domestic market prefer to purchase materials from local producers. The prevalent expectation in the market is that the mills will further raise their prices by €50-80/mt. The increase registered in
India's tax rates will also affect the prices of products to be imported to
Spain from
India. In addition, there are offers given to
Spain from
Brazil. Last week's ex-
Brazil HRC offers were at €740-750/mt CFR; however the offers in question might change with the latest rises registered. It is also heard that traders are giving offers for Russian, Chinese, Libyan and Indian-origin flat products, for which they had previously taken positions. Offers for ex-Russian
HRC are being given at €700-760/mt CFR FO for 90-day deferred payment. As regards ex-
China offers, lower levels are heard. It can be said that buyers in
Spain are not keen on August-September shipments either; however, a possible price rise by the local producers might activate the market to a certain extent. Nevertheless, it is also a fact that end-users are having difficulty in digesting the current prices.
The
UK market has been in a tranquil state for a long time compared to southern European countries and has been lagging behind the global
flats markets. In the
UK market even the import material prices had been standing at higher levels than the prices for ex-Corus products. However, with the price hike announcement made by Corus last week, it can be said that the
UK market will gain more momentum. According to Corus' announcement, the price rise to take effect as of June 1 varies in a range of £60-80/mt.
As regards the Eastern European markets, there is robust demand for
flats as reported in our previous analyses. In the offers made by the Slovakian and Serbian facilities of
US Steel Kosice,
HRC offers vary in a range of €700-710/mt. However, the expectation is that the mills here will also raise their prices.
The global
flats markets have been going through a very active period this week. The pressure imposed on mills by governments such as
Iran and
India due to inflation concerns against the background of soaring prices has found expression in the adjustments of duty rates. While the question in people's minds is whether the markets will calm down or otherwise, the indications are that the price uptrend will be maintained for a longer while in the context of the latest
scrap prices and
iron ore deals. It will be possible to see with greater clarity the effects of all these movements in the upcoming days.