Despite buyers asking for lower prices, EU-based HRC producers are refusing to decrease their prices as they claim their order books are full until the end of this year. The result is that trading activities are still scarce in the region even though most players have now returned from their summer break. Compared to August 24, SteelOrbis reference prices for HRC in the EU market have decreased by €5/mt on average to €1,000-1,150/mt ex-works. More specifically, achievable prices are currently in the €1,000-1,040/mt range in the Italian market and mostly at €1,120-1,150/mt in northern Europe, all ex-works. Meanwhile, local mills have kept their official offers at higher levels, up to a maximum of €1,200/mt ex-works.
Several sources think prices could decline further due to decreasing global raw material prices, competitive import offers, increasing material availability, and weak demand. In particular, demand from the automotive sector may remain subdued in the coming months due to the global semiconductor chip shortage which has been limiting car production.
Meanwhile, as reported previously, some sources think that in the fourth quarter domestic prices could be supported by a potential settlement of the three-year-old steel tariff dispute between US and EU by November 1, which might cause EU exports to increase. However, the removal of the US Section 232 tariffs against the EU would also lead to a review by the EU of its steel safeguard, which in turn would cause import volumes to increase.