Although it is still early to talk about a full-scale recovery, sentiment has improved in the European HRC market as market insiders agree that HRC prices have reached the bottom and are going to increase. In the import segment, no offers have been voiced at below €600/mt CFR anymore, with higher offers reported by several suppliers, though many are refraining from new offers so far, waiting for a clearer market picture first.
According to sources, achievable spot prices are at €650-680/mt ex-works, with the lower levels being recorded in Italy and the higher levels in northern Europe. More specifically, while the tradable HRC prices in Italy have been voiced at €650-660/mt ex-works, Italian mills have settled their offers at around €670-680/mt ex-works. At the same time, according to market insiders, some sales for ex-Italy HRC have been reported in Germany at €670-680/mt delivered this week.
Meanwhile, higher offers at €700-710/mt ex-works have been voiced in northern Europe, though tradable prices have still been reported at the lower level of €680/mt ex-works. Sources said that buying activity has remained generally limited with only occasional volumes being traded, while European mills have kept negotiating contracts with the automotive sector for the second half of this year.
At the same time, in the import segment, trade activity has been generally weak this week, as, while several suppliers have decided to go higher, some have remained silent so far, “preparing for the next round of hikes”, sources believe. In particular, most ex-Asia HRC offers have been voiced in Italy at €610-620/mt CFR, compared to €580-610/mt CFR last week, while several offers, for ex-Vietnam HRC in particular, have been heard in Spain at €615-620/mt CFR. At the same time, according to Spanish traders, offers for ex-Egypt HRC have been voiced in Spain at as high as €645/mt CFR for September shipment, while other suppliers like those from Japan, Taiwan and South Korea have been mainly staying away from new offers to Europe so far. “As so many foreign suppliers are silent, while there is less pressure from the mills to sell, I believe that the market is moving up,” a market insider told SteelOrbis.
Furthermore, import offers for ex-Asia HRC in northern Europe have been heard at €620/mt CFR and above levels, versus €600-620/mt CFR last week.
$1 = €0.91