Although this week local HRC prices in Europe have remained at relatively unchanged levels compared to last week, market sentiments have improved following developments in relation to steel safeguard measures, with a number of market insiders expecting local mills to increase their offers for domestic HRC in the short run by at least €20/mt. In the meantime, the new safeguard adjustments announced back on May 29 have affected overseas HRC suppliers, especially those who are included in “other countries” category, with offers from Asia almost disappearing from the market this week.
More specifically, official offers from European mills have remained unchanged over the past week, standing at €640-650/mt ex-works in Italy and at €640-660/mt ex-works in northern Europe. However, the tradable prices both in Italy and in the north have remained at €630-640/mt ex-works. According to sources, only a minimal improvement has been seen in trade activity in the region, and most purchases were done since local mills are expected to increase their prices in June. “Some say there will be a €20/mt increase from ArcelorMittal, while other expect more hikes, with offers at €700/mt in July,” a market insider told SteelOrbis. Other sources, are less pessimistic, emphasizing that it is impossible to predict the real potential increase of European HRC prices, but it is obvious that the new safeguard measures would stabilize the local market.
Specifically, on May 29, the European Commission announced that the safeguard measures will be extended for two more years, though it also suggested a 15 percent cap per single country over the residual HRC quota volume, as SteelOrbis reported earlier. Thus, according to market insiders, the most competitive import offers from Asia are likely to be removed from the market for several months. “Most likely the quotas for the next quarters are already filled up. There may be no material available until April next year,” the representative of an Italian mill told SteelOrbis.
Thus, no offers have been heard from Vietnam, Japan, Taiwan and even India this week, while market insiders have reported indicative offers for ex-Turkey HRC at around €610-620/mt CFR Spain, including duty, versus €600/mt CFR last week, while talk about lower ex-Turkey HRC at €585/mt CFR Italy, including duty, has also been circulating in the market. Besides, offers for ex-Saudi Arabia have been heard in Spain at around €635/mt CFR through traders this week, though no deals have been reported so far since, according to one market insider, “No one knows where the workable level is now as customers are waiting for ArcelorMittal’s increases.”