Sentiment has worsened in the EU hot rolled coil (HRC) market, where purchasing activities have slowed down in the past week in anticipation of possible price declines. However, the average price is up €5/mt compared to last week to €700-720/mt ex-works, in both northern and southern Europe. The slowdown in activity has been attributed to recent declines in raw material and steel prices globally. In particular, import scrap prices decreased to $408-420/mt CFR Turkey yesterday, January 26, while ex-China HRC offers have declined by about $65/mt since early January. Nonetheless, supply remains low in the EU market, which could result in a stabilization of current price levels in the short or medium term, or in slight price decreases, according to sources. In fact, European mills are still enjoying strong order books, with some of them being almost sold out for second quarter production, especially in northern Europe.
Meanwhile, import offers have remained high compared to local prices, although small volumes have been bought from India recently at around €680-700/mt CFR southern Europe. Meanwhile, ex-Turkey offers have remained at $800/mt FOB officially (€660/mt FOB or €680-690/mt CFR depending on volumes), antidumping duties included, but $20-30/mt discounts are granted during negotiations, according to sources. The same applies for ex-Egypt offers, reportedly at €700/mt FOB. Finally, there have been rumors regarding a sale of HRC from Vietnam to EU at €680/mt CFR. Import activities could increase in the EU market considering the expiration of the EU steel safeguard at the end of June. However, as reported previously by SteelOrbis, 12 EU states, including Germany, Italy, and France, have asked the European Commission to extend the current measures as steel demand has not recovered yet due to the consequences of the Covid-19 pandemic, while stocks in exporting countries have been piling up, which would expose the EU steel industry to risks in the future.