HRC prices have decreased further in the EU domestic market in the past few days, mainly due to competitive import offers, increasing material availability, and weaker demand. Compared to September 3, SteelOrbis reference prices for HRC in the EU market have decreased by €25/mt on average to €1,000-1,100/mt ex-works. More specifically, achievable prices are currently in the €1,000-1,040/mt range in the Italian market and up to €1,100/mt in northern Europe, all ex-works. Meanwhile, some European mills are offering material at not higher than €1,150/mt ex-works, while a few others have decreased their offers to €1,100/mt and slightly lower, according to sources. Mills in general still claim their order books are full until the end of this year.
Speaking of imports, sources have reported offers below €900/mt CFR southern Europe recently. For example, it is rumored that an Italian steel pipe producer has ordered ex-Russia HRC at €850/mt CFR, duty included. Meanwhile, sources underlined that EU ports are congested due to both structural and pandemic-related issues. Moreover, "even after material has passed customs clearance, deliveries are difficult due to the lack of trucks," one source added. Large volumes are waiting at EU ports, and many market players believe that Indian HRC quota will be exhausted rapidly in October, as it was in July.
As reported previously, domestic demand from the automotive sector is still suffering from the lack of semiconductor chips globally. However, according to sources, other end-user sectors should perform better in the coming period and help support domestic flat steel prices. "During these weeks, long-term contracts are being negotiated. Therefore, I don't think mills are willing to decrease their prices significantly," one source commented, adding that, despite transaction prices trending down since June, they are still very high compared to past years. Moreover, prices may be boosted by the potential settlement of the three-year-old steel tariff dispute between the US and the EU by November 1, as EU mills would be able to increase their exports. In that case, supply would decrease domestically, which would push EU distributors and end users to ask for the removal or modification of the EU safeguard on steel imports.