Some market sources have the feeling that the bottom may have been finally reached in the European HRC market as after numerous bookings at low price levels were done over the past week, rumors of higher prices from domestic mills for January delivery HRC have emerged in the market. Besides, some rebounds have been seen in import HRC prices as well, providing additional support for the market mood. Though a significant price uptrend is doubtful so far given no significant signs of demand growth apart from seasonal restocking before the winter holidays.
Workable prices in the EU HRC market have settled at €590-650/mt ex-works, against €630-670/mt ex-works at the beginning of last week. More specifically, a price around €590-600/mt ex-works is now more common in the southern European market, in Italy in particular, compared to €620-630/mt levels last week, while local HRC prices in northern Europe have been voiced at € 620-650/mt ex-works, the same as last week. “Italian mills have sold a lot of HRC in the last few days and they have filled their order books. Now they are asking for some increases, while the real level is not clear yet. Some rumors are at €650/mt ex-works, while some are even talking about €700/mt ex-works for January delivered coils, which sounds quite impossible,” a market insider told SteelOrbis. At the same time, after selling the materials, Italian mills have reportedly suspended their sales, giving no official prices for HRC. “They [mills] are also carefully monitoring the situation in India after the cancellation of export duties, as it could affect the EU market as well. Besides, many mills have many doubts about decent market demand in the first quarter of 2023,” another source added.
“We have the feeling that we have touched the bottom. However, it is hard to believe in a real rebounding, rather an adjustment to cover costs, but not a significant uptrend as there is still lot of hunger between the mills,” a Spanish trader said.
Meanwhile, import HRC offers in southern Europe have started to rebound after weeks of declines, reaching €600-630/mt CFR, up by 10-30/mt week on week, depending on the origin. In particular, according to market insiders, most Asian suppliers, like those from Japan, Taiwan, South Korea and Vietnam, have withdrawn their aggressive offers at €560-590/mt CFR, and are currently offering at not below €600/mt CFR levels. Suppliers from Japan have been staying out of the Italian market this week. After a deal for ex-Japan HRC was reported at €610/mt CFR Spain at the end of last week, now ex-Japan offers have settled at €630/mt CFR Spain this week. Meanwhile, offers for ex-India HRC have been heard at around €600/mt CFR.
“European mills are going to be closed from mid-December until mid-January, so I hope to see an increase in demand after the holidays. Currently, already something is moving compared to last month, but it is still very slow,” an Italian trader told SteelOrbis.
