The European hot rolled coil (HRC) market has remained weak as activities are still slow due to very low end-user demand and sufficient stocks among distributors. Domestic prices have weakened further in the past week both in northern and southern Europe. Local HRC base prices went from €400/mt ex-works to €390-395/mt ex-works northern Europe. At the same time, they have decreased from €380-390/mt to €370-380/mt in the Italian domestic market, all ex-works.
Sources have pointed out once again that the automotive crisis is taking a toll on the European flat steel market, as well as on other consuming sectors such as domestic appliances. According to the latest data from European Automobile Manufacturers' Association (ACEA), new car registrations were down by 52.3 percent in Europe in May, while they fell by 41.5 percent in the first five months, both year on year. On the bright side, as reported previously, there are still rumors that European steelmakers will raise their offers as raw material prices remain relatively strong, and also because the amendments proposed by the European Commission on the EU safeguard measures have been approved by the state members. This will mean lower imports, according to most sources.
The import market was already slow in past weeks due to uncompetitive offers and the ongoing investigations on Turkish HRC. According to Turkish HRC sellers, earlier this week $420/mt FOB (around €390/mt CFR) was the highest level that European buyers were considering workable, while Turkish mills are insisting on $440/mt FOB minimum for August-September shipments. However, with the decrease of HRC prices in the EU, imports from Turkey have become less probable, at least in the short run. The latest offer level from Russia’s Severstal was $410/mt FOB Baltic Sea for the northern EU, which corresponds to around €390-395/mt CFR including the €17.6/mt antidumping duty, SteelOrbis estimates.