Similar to most HRC suppliers globally, North Africa-based HRC producers have also been trying to digest the long-awaited EU country-specific quota announcement, which will definitely have some serious impact on the HRC trade with the EU and will lead to shifts of volumes to other markets. As a result, according to sources, Algeria in particular has been evaluating possible outcomes and strategies while in terms of trade concentrating more on domestic sales and mulling increases in slab exports. In addition, the Algerian supplier has been working on launching its HDG sales, which may help to deal with the current tough situation in the HRC segment. However, as SteelOrbis understands, the EU had been the initial target for Algerian coated steel and there is no individual or sizeable “others” quota available for these products.
In Algeria, despite somewhat slow sales seen lately, official domestic HRC prices have increased by DZD 2,000/mt ($13/mt) for July deliveries to DZD 110,000/mt (695/mt) ex-works, SteelOrbis has learned. However, according to sources, discounts down to DZD 105,000/mt ($665/mt) ex-works and even slightly lower still seem to be possible for large-project demand and for serious buyers in the market.
As for exports, Algeria’s situation is one of the toughest in view of the announced EU CSQs - the country was not granted an individual quota and has access only to a very small amount of the shared quota. As a result, HRC offers to Europe have been withdrawn and, according to sources, there had been up to 70,000 mt of HRC orders from Algeria to Europe, with a good part of them waiting for third quarter customs clearance, while many buyers have been trying to cancel the orders, though without much luck. Some sources estimate that, with the loss of the EU even temporarily, Algeria will have around 120,000-140,000 mt of HRC to be distributed to other markets.
For the MENA and African regions, the Algerian mill has dropped $10/mt off its price to $620/mt FOB base for July shipments. However, buyers believe $600-610/mt FOB levels should be achievable for decent volumes.
It is mostly believed that Algeria is going to apply for the CSQ revision for itself and many expect the process will be successful and the amendment should be presented within up to six months. Until then, the Algerian HRC producer is expected to woo domestic buyers, try to take up more orders from the MENA region and Africa, but most of all it will aim to increase its steel slab sales. “Algeria will be granted the ‘slab supplier of the year’ title. Their slab is perfect for coils,” a European market player told SteelOrbis. Once the market settles a little, Algeria will have two to three full slab cargoes available for sale per month, although deals in the EU are foreseen to be for 10,000-30,000 mt lots.
Local prices in DZD include 19 percent VAT.
$1 = DZD 132.92
