Although European producers have kept trying to maintain their offers at high levels, the tradable level has been trending down in the EU, as transaction activities have been scarce after the Easter holidays amid weak demand and high levels of stocks. Besides, new import HRC offers have kept decreasing, putting additional pressure on local quotes.
At the same time, the future trend lacks clarity, as, on the one hand, most European producers, both in the north and south of the region, have been offering their HRC at around €850-870/mt ex-works for July and some for August deliveries, citing their limited allocations, while, on the other hand, European distributors have been expressing their fears regarding the future price direction amid weak end-user demand and the bearishness in the import segment. According to sources, the tradable HRC price level in Italy has been estimated by local customers at €845/mt ex-works on average, down by €5/mt week on week, while the workable prices in northern Europe have been reported at around €850-860/mt ex-works, compared to €860/mt ex-works last week.
“The target prices of European mills, especially in the North, at €900/mt ex-works voiced before the holidays have become rather unrealistic this week, as even prices at €880-890/mt have been rejected by most buyers,” a market insider said.
Meanwhile, this week the market has been actively discussing numerous delays caused by fires at ArcelorMittal in Spain and France. “The situation regarding delays especially in northern Europe is getting worse given that ArcelorMittal lost significant production volumes in Spain and France and can't keep up with their order books, provoking massive delays,” a European mill’s representative told SteelOrbis, adding, “According to some insiders, tightened supply can support local prices or at least not let them fall significantly in the short run.”
In the meantime, import HRC prices in southern Europe have shown a sharp drop this week, falling to €715-750/mt CFR, versus €750-800/mt CFR last week. The lower end of the range corresponds to offers for ex-India HRC from second-tier mills at around $785/mt CFR (or €715/mt CFR), while other Indian suppliers have been voicing their offers at around $800/mt CFR (or €726/mt CFR), compared to offers at €760/mt CFR last week. Besides, according to sources, a deal from an Indian second-tier mill has been heard in Italy this week at as low as $750/mt CFR, which translates to around €680/mt CFR, though this information has not been confirmed by the time of publication. “There are two different markets, the commercial one, with limited material gamma and maybe without the CE mark, which is cheap and bought from overseas. And there is a high-quality market with different grades, for which you have to pay the price of EU mills, on average €845/mt base ex-works this week,” a Spain-based trader said.
Offers for ex-Asia HRC have been reported at €735-750/mt CFR, down by €15-30/mt week on week, depending on the supplier, with offers from Indonesia and Vietnam standing at €735-745/mt CFR, while offers for ex-Japan and ex-South Korea have settled at around €745-750/mt CFR southern Europe.
Besides, offers for ex-Egypt HRC have been heard in Spain at around $815-830/mt CFR, or €740-753/mt CFR, compared to €770/mt CFR last week.
$1 = €0.91
