Transaction prices in the EU hot rolled coil (HRC) market have continued to increase in the past week amid improved demand, reduced supply, and the lack of competitive import offers. In the Italian domestic market, HRC base prices have reached €460-470/mt ex-works, versus €450-460/mt level recorded last week. At the same time, prices have increased from €465-480/mt to €480-490/mt in northern Europe, ex-works.
At the end of last week, the European Steel Association (EUROFER) filed a registration request in the antidumping case against ex-Turkey HRC which was launched last May. This means that retroactive duties may be imposed for the three-month period before the imposition of possible provisional AD measures by the European Commission. According to sources, a preliminary decision will be announced on or by December 23, while AD preliminary measures would come into force in mid-January. This means that retroactive duties may concern the period from mid-October onwards. For this reason, EU buyers are reluctant to purchase import material from Turkey. In July this year imports of ex-Turkey HRC into the EU were almost halved compared to the same month of 2019, according to Eurostat data. At the same time, import offers from other countries remain not competitive. As Indian steelmakers are focusing on local sales, where both demand and profit are better, they are not being aggressive in the export market, and their HRC offers are currently at €500/mt CFR Italy and slightly above.
As reported previously, sources believe that HRC prices in the EU will keep trending up in the coming weeks, reaching and even exceeding the €500/mt threshold. Local producers have been seeking price levels of €490/mt in the Italian market and of €530/mt in northern Europe. Local demand has been good in the past weeks with steelmakers receiving a good amount of orders from the automotive industry. However, some sources underlined that this revival is mostly due to restocking activities and that they are not sure whether consumption will support higher prices in the long run or not. Local HRC prices could come under pressure in the last two months of 2020 also due to the restart of more idled plants around Europe, sources added.