Most market sources have the feeling that the bottom may have been finally reached in the European HRC market as domestic HRC prices have stopped declining and some producers have even increased their offers this week. However, despite the slightly more positive mood, restocking has not started yet. In the import segment, nevertheless, the situation has not changed over the past week as the interest in import coils has remained minimal while new import HRC offers from almost all the main suppliers have remained unchanged in southern Europe, except from Turkey.
Workable prices in the EU HRC market are now at €750-900/mt ex-works, against €740-870/mt ex-works recorded last week. More specifically, a price around €750-800/mt ex-works is now more common in the southern European market, up by €10-20/mt week on week, while local HRC prices in northern Europe have been voiced at €850-900/mt ex-works, up by €30/mt on the higher end of range over the past week. According to market insiders, several transactions for HRC have been still voiced at around €850-860/mt ex-works in northern Europe this week, but several mills have increased their HRC offers up to €880-900/mt ex-works. “The difference between the northern and southern HRC markets is that in the north market insiders are worried about material shortages in autumn coupled with gas shortages as they need a lot for production, and so they are buying more. Meanwhile in southern Europe people do not feel this, so they are only watching the situation and are not moving,” a market insider told SteelOrbis.
During the past weeks, restocking has been forecast in the European market for the end of July for September deliveries, though some market insiders believe that it could be postponed in Italy until September, because “the market does not need to restock much considering the decrease by 30-40 percent in the budgets for the automotive and white-goods industries, and in September the expected big problems in energy supplies in the EU will force the mills to increase their prices, but that will not mean an increase in end consumption,” according to a source.
As for import prices, offers to southern Europe have remained mainly unchanged at €715-760/mt CFR, depending on the origin. The indicative offers for ex-India boron-added coils have been voiced at $715-730/mt CFR, compared to €710-720/mt CFR last week, but, according to market sources, these offers do not reflect the real market prices and the higher price level only reflects the appreciation of the US dollar against the euro as Indian suppliers usually offer their HRC in dollars.
Meanwhile, offers from Asian suppliers, Japan, Taiwan and South Korea have been voiced at €740-760/mt CFR southern Europe, the same as last week. New offers from Vietnam have been announced in the region at around €740/mt CFR (or $650/mt FOB) this week.
At the same time, suppliers from Turkey, who last week made attempts to increase their prices amid better sentiments in the scrap segment, have increased their HRC offers again, this week to €750/mt CFR Italy, including duty, compared to €720-750/mt CFR Italy week.
“This current situation at least means that HRC prices have reached the bottom. It is also a fact that the situation in the Far East has not improved enough to say we are now at a turning-point,” a market insider stated.
