Although no significant improvement has been reported in end-user demand in Europe over the past week, most European HRC producers have been more positive in terms of their offers for domestic buyers, while interest in imported coils has been minimal in the region. However, the sustainability of the uptrend remains very questionable, as most European buyers expect that demand will not be able to support significant HRC price rises at least before the end of this year.
More specifically, according to sources, this week, mainly supported by rising input costs and production cuts, European mills have made attempts to increase their offers for HRC to €635-650/mt ex-works for December shipment in Italy and to €650-680/mt ex-works for January shipment in northern Europe, up by €15-30/mt and by €10-40/mt, respectively, over the past week. However, the tradable prices in Italy have remained at €600/mt ex-works, the same as last week, and some buyers have even mentioned the achievable price as being at €600/mt delivered, while the workable price in northern Europe is still estimated at €600-620/mt ex-works as well.
“No transaction has been reported at the new price levels targeting by the mills, as customers are waiting to understand what the right price level could be,” a representative of one of the biggest Italian mills told SteelOrbis, adding, “More HRC restocking is expected from mid-November in the EU, but real demand will not rise earlier than next year.”
As for the import market, most offers for ex-Asia HRC in particular have been heard at €600/mt CFR, including those from Japan, Indonesia and Vietnam. “Following a long pause in purchases, this week we heard negotiations have resumed and buyers aim to sign new deals at below €600/mt CFR for January delivery, though no fresh deals have been reported so far,” a Spanish trader told SteelOrbis.