The current week has been rather quiet in the European hot rolled coil (HRC) market since most of the market players and businesses are already in vacation mood. However, despite the low trading activity, the general market sentiment is not yet negative and prices have remained relatively stable over the week. Moreover, some of the suppliers are targeting an increase in their offers, counting on better demand starting from early September.
According to sources, the general offer level for HRC across the EU is at €670-700/mt ex-works in the official offers, while the workable levels are at €640-650/mt ex-works in Italy and €650-670/mt ex-works in the north. Some of the mills in Germany have reportedly been willing to return to €700/mt ex-works in offers for November deliveries, although it is largely believed to be a premature step for now.
In the import segment, the quotas for the third quarter are close to being filled, which means that October-November deliveries will be soon under discussion. Some of the EU market players expect there are some earlier booked cargoes still on the water due to be discharged in July, August and September and they will now have to wait until October 1. Moreover, it is possible that the quota for the third quarter will be used up in the first days of the period, which may result in some buyers paying the import tax. Such a situation might provide some additional justification for the local mills in the EU to take an upward step. “Today offers [from Asia] should be for October shipments, meaning December arrival, so still acceptable,” a source said.
In the import segment, the general level of offers is at €590-630/mt CFR depending on the supplier and the sales destination, which is more or less in line with the indications of last week. The lowest reported offer has been from Vietnam at €580/mt CFR. In Spain in particular, Japan has been reported at €620/mt CFR, while Taiwan and Turkey have been offering at €635/mt and €640/mt, respectively, both on CFR basis. Offers from South Korea have been rumoured at €610/mt CFR with a possibility of a €10/mt discount. The trading activity in the import market has been fairly muted this week as buyers are already in holiday mood and are also considering the quota situation.