Buyers in EU HRC market still in wait-and-see mode

Business activity in the European hot rolled coil (HRC) market has been weak lately. The main buyers still aim for lower prices for HRC from mills, as the sales prices for their own goods have been under increasing pressure from low demand. Meanwhile, new import HRC offers from almost all main suppliers have kept decreasing in Italy and remained mainly unchanged in Spain, though the interest in import coils has remained minimal as “very few buyers would risk booking imported materials nowadays”.

Workable prices in the EU HRC market are now at €740-870/mt ex-works, against €780-880/mt ex-works recorded last week. More specifically, prices around €740-780/mt ex-works are now more common in the southern European market, down by €20-40/mt week on week, while local HRC prices in northern Europe have been voiced at €850-870/mt ex-works, down by €10/mt over the past week. Notably, sentiments in northern Europe have started to improve this week, with most mills largely believing that HRC prices should finally stabilize in July and August. However, market insiders in southern Europe do not share their colleagues’ optimism about prices and believe there is still room for a further decline, and some are expecting the market to reach a bottom at €700/mt ex-works.

As for import prices, offers to southern Europe have dropped to around €710-760/mt CFR, compared to €720-760/mt CFR last week, with the lower end corresponding to the most aggressive ex-India HRC offers. In particular, offers from India for boron-added coils have been reported at €710-720/mt CFR Italy, down by €10-20/mt week on week.

Furthermore, offers from Asian suppliers, Japan, Taiwan and South Korea have decreased to €740-760/mt CFR Spain, down by €10-20/mt week on week, depending on the origin. Meanwhile, most ex-Asian HRC offers have been relatively stable in Italy this week, with only a €20/mt decrease seen for ex-South Korea materials.

At the same time, indicative offers from Turkey have been reported at around €720-750/mt CFR Italy, including duty, up by about €10-20/mt week on week, as this week Turkish mills have made attempts to increase their prices amid the better sentiments in the scrap segment, though demand has remained weak in the country.

Import HRC offers, CFR southern Europe