European flat steel producers come under increased pressure

Wednesday, 29 March 2017 17:51:00 (GMT+3)   |   Brescia
       

The situation is changing in the European flat steel market amid market talk that the European Commission may not apply any provisional duties on imports of hot rolled coil (HRC) from Brazil, Iran, Russia, Serbia and Ukraine in its decision on April 7. Since the final determination is due on October 7, sources say that, if the European Commission does not apply preliminary rates, there will then exist a window in which HRC imports may again become an interesting alternative for European buyers. 
 
According to market sources, HRC offers coming from Russia have already declined to attractive levels, such as a minimum of €490/mt ($524/mt) CIF Italian ports, and they could fall to even lower levels in the coming period. As a result, pressure is mounting on European flat steel producers who have not decreased their prices since last September. Currently, the market is very quiet and transaction volumes are at minimal levels as purchases are in line with buyers' immediate needs. The news circulating about the possible decision by the European Commission has frozen the market even further, as buyers are waiting to understand what will be the impact on prices. 
 
Even though European producers have not decreased their prices officially, the flat steel prices reported in past weeks are not considered practical anymore. Sources say that buyers are willing to purchase HRC at a base price around €520/mt ($556/mt) ex-works and to conclude CRC bookings at €610-630/mt ($653-674/mt) ex-works. 
 
The only exception is HDG, for which the €650-680/mt ($695-728/mt) price levels are still valid. According to market sources, the price of this product is unlikely to decrease significantly in the coming weeks given the lower availability of HDG supplies.
 
€1 = $1.07


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