The hot-rolled coil (HRC) market in the EU has seen little change in terms of business activity, with demand remaining at modest levels amid relatively high or medium stock levels depending on the country and region. While import HRC offers, both on DDP and CFR bases, have barely moved over the week, trade in the segment has remained shy, sources say. Still, workable domestic prices have slid in some cases, particularly in the southern part. However, most market players are not considering it a slump, but as a result of thin overall demand and some mills being under a bit more pressure to sell versus those already sold out for July. The quota distribution issue remains the key factor weighing on import demand, particularly while, in theory, Turkish and Algerian HRC still has some advantage due to lower estimated CBAM costs compared to Asian material.
In northern Europe, most mills’ official HRC offers have been reported at around €700/mt ex-works for July deliveries, versus earlier targets at €700-710/mt ex-works. The tradable levels have been mostly settled at €680-690/mt ex-works, the same as a week ago, though some sources reported small deals at closer to €700/mt ex-works as well.
In the Italian market, mills’ official offers for HRC have been reported at €680-690/mt ex-works, down from the €690-705/mt ex-works targets of the past week. The workable HRC prices in the southern part of the EU, according to sources, have settled at €670-685/mt ex-works, although some traders have reported that €665/mt ex-works levels are reachable in some cases as well. “There are talks about €680-690/mt delivered [from a large mill] offers and even that is considered high at the moment,” a source told SteelOrbis.
In the import segment, the HRC offers from Algeria have been reported at €730/mt DDP, while Turkish material has been available this week at €690/mt DDP versus discussed deals of the past week at €675-685/mt DDP. In addition, according to sources, ex-Vietnam HRC has been on offer at €690-700/mt DDP in the southern part of Europe. In the meantime, HRC offers from South Korea have been reported at €700/mt DDP.
Import HRC offers on a CFR basis have been reported at €610-615/mt CFR from Turkish mills and at €645-650/mt CFR from Algeria. However, next week there should be greater clarity on HRC from both these origins as the mills will be back from the religious holidays. “Turkey, I think, will be focused on pushing sales for August-September shipment as their quota for Q3 might be already exhausted considering that some sales were concluded back in March-April,” a trader told SteelOrbis. “The Algerian mill controls the quota, but the volume is limited as per the others’ cap,” a source added.
In addition, ex-India HRC offers have been reported at $685/mt CFR, or €590/mt CFR, pretty much in line with the past week. Some sources have also informed about HRC offers from Indonesia at around €550/mt CFR, which is considered quite aggressive under the current market conditions. Sources report that the potentially high CBAM costs for Indonesian material, coupled with duty-related issues, make Indonesian material rather risky to purchase.
