Although the situation for European HRC suppliers has not changed much over the past week, with HRC domestic prices from mills being maintained at the same levels, market insiders have started to actively discuss local mills’ plans for further price increases in April. However, the sustainability of the trend is very questionable, as most buyers have kept avoiding large-volume purchases, while import HRC is becoming more attractive in the region.
Sources said that domestic prices in the EU HRC market have remained at €830-870/mt ex-works, with workable prices in Italy still standing at €830-850/mt ex-works, with the official HRC offers from southern European mills have been voiced at €850-870/mt ex-works for mainly June deliveries. In northern Europe, prices from mills have been heard at €850-870/mt ex-works for June and July deliveries, the same as last week. At the same time, this week the market has been actively discussing reports that European mills are aiming to increase their HRC offers further to €900/mt ex-works in the next round, though buyers have been insisting there is no room for further growth.
“Mills are likely to push for higher prices not only in the second quarter but also in the third, but we doubt that service centres will be able to pass on the increases downstream. Besides, we can already see that there is a reduction in consumption as compared to last year and it will also slow down in April because of the Easter holidays in Italy, while some believe that the production rise in Europe will also affect prices,” an Italian trader told SteelOrbis.
At the same time, according to sources, more clients have started to look at more attractive imports as the lead times from some suppliers is more or less the same as from local mills. “For example, import HRC from South Korea and Japan will arrive in August, and will be used in September, as all business will be stopped in August, while local mills have already been offering July delivery coils, which means they are almost in the same situation, but the price gap is widening,” another trader said.
More specifically, this week, import HRC offers in southern Europe have remained at €750-790/mt CFR, depending on the origin and destination, versus €750-800/mt CFR last week. However, some suppliers, like those from Japan and South Korea have been providing discounts in new offers to Europe at €770-780/mt CFR, down by €20/mt week on week. Offers for ex-Vietnam HRC are unchanged at €770/mt CFR, while, according to sources, several deals for ex-Indonesia HRC have been signed at €755-765/mt CFR Spain this week. Meanwhile, offers from India have been reported at $830-845/mt CFR, or €764-778/mt CFR southern Europe, reflecting the same level on dollar basis as last week. According to some sources, offers for ex-India HRC have also been heard in Italy at €750/mt CFR, but this information has not been confirmed by the time of publication.
Offers for ex-Egypt HRC have been voiced in Spain at around $830/mt CFR (€764/mt CFR), compared to deal prices at $825-835/mt CFR last week.
$1 = €0.92
