Given the impossibility of competing with decreasing import HRC prices, European HRC producers have been forced to drop their offers again this week. Besides, the decision of global steel producer ArcelorMittal to decrease its HRC prices for September deliveries has increased the pressure on other European steelmakers. In the meantime, most market sources have the feeling that import HRC prices will hit the bottom in the near term, or at least that the downtrend is likely to stop for some time.
More specifically, HRC offers from European mills have been evaluated at €700-770/mt ex-works, versus €750-780/mt ex-works last week. The lower end of the range corresponds to the tradable price level for HRC in Italy, while offers from mills have been heard at €720-750/mt ex-works, compared to €750/mt ex-works last week. Meanwhile, customers in northern Europe estimate the workable prices at around €750-760/mt ex-works, down by €10-20/mt week on week. “After new offers from ArcelorMittal were announced at €770/mt ex-works, most market insiders expect other mills to follow suit and in northern Europe to lower their offers next week, as Germany is on holiday this week,” a market insider told SteelOrbis.
This week, ArcelorMittal has decreased its HRC offers for September deliveries across Europe to €770/mt ex-works, from official offers at €870/mt ex-works announced back in April, and from “unofficial levels” at €800/mt ex-works reported in early May and in mid-May.
As for import prices, offers to southern Europe have settled at around €590-640/mt CFR, versus €590-660/mt CFR last week, depending on the origin and destination. The lower end of the range corresponds to ex-Vietnam offers heard at €590/mt CFR Italy, the same as last week. Meanwhile, according to market insiders, a deal for ex-Taiwan HRC has been signed in Spain at €620-625/mt CFR, compared to offers at around €645/mt CFR last week. Besides, another deal for around 80,000 mt ex-Egypt HRC has been reportedly done at €625/mt CFR Spain, versus offers at €630/mt CFR last week.
Offers for ex-South Korea HRC have been voiced at €620/mt CFR Spain, down by €30/mt week on week. Besides, sources said, a deal for 20,000 mt of ex-South Korea HRC have been sold to Italy at €606/mt CFR this week. At the same time, according to Spanish customers, offers for ex-Japan HRC have been heard at around €640-645/mt CFR, down by €15-20/mt over the past week, though, talk about ex-Japan offers at €610/mt CFR has been circulating among Italian buyers. Besides, offers for ex-India HRC have been voiced at around $650-670/mt CFR southern Europe, which translates to €605-623/mt CFR, versus €645/mt CFR last week. “There is no clarity in ex-India offers, as while some customers report offer at €610/mt CFR, others, in Spain in particular, say India is offering at €660/mt CFR,” a market insider said.
Furthermore, import offers in northern Europe have been voiced at €620-640/mt CFR, compared to €620-670/mt CFR last week, with most offers coming from Asia.
“Given the current situation, a lot of people believe import prices are about to reach the bottom in the next round. Local mills in Italy are likely to agree on €680/mt ex-works in new sales, while mills in the north are expected to come up with new offers in early June for September delivery HRC,” a market insider told SteelOrbis.
$1 = € 0.93