While no trading has been seen in southern European HRC market amid the continuous summer break period, business activity in northern Europe has remained slack as well, though market insiders have started to actively discuss local mills’ plans for around €50/mt increase in September. However, the sustainability of the trend is very questionable, as most European buyers expect that the demand will not be able to support significant HRC price rises in the region.
In the last week of August, tradable local HRC prices have been estimated at €630-650/mt ex-works in Italy and at €640-650/mt ex-works in northern Europe, same as two weeks ago. However, this week the market has been actively discussing reports that European mills, especially those in the north, are aiming to increase their HRC offers to €700/mt ex-works in the next round, after the market will return from summer break in early September. “Mills want to push for higher prices expecting the recovery of demand, but we doubt that service centres will be able to pass on the increases downstream. Besides, there is no real support for such demand improvement,” a market insider told SteelOrbis.
At the same time, this week, import HRC offers for mainly Japanese, Taiwanese and Indonesian origin have been reported in southern Europe at $650-660/mt CFR, which translates to around €598-608/mt CFR, versus offers at €590-635/mt CFR in late July. Meanwhile, no deals have been reported as according to sources, there are high safeguard-related risks as a huge number of ex-Asia HRC cargoes coming into Europe in August-September would not be cleared through until October 1, when the new quarter will start, as the “other countries” quota allocation for the third quarter was totally used before the end of July.
“Vietnam, Taiwan, Japan and Egypt are the major HRC suppliers to the EU under the “other countries” category, though I believe Indonesia is still exempt with developing nation status,” an international trader told SteelOrbis.
In the meantime, since EU quotas for “other countries” are exhausted, Turkish HRC suppliers received firm inquiries for big lots from end users and stockists in Europe this month. In particular, over the past two week, more than 100,000 mt of ex-Turkey HRC were sold to Spain, Antwerp, Italy, UK and Egypt. The deal price in Europe has been reported at $630/mt CFR, excluding AD duty, which translates to around $660-680/mt CFR, or €608-627/mt CFR for October shipment. “They [Turkish exporters] want higher numbers now as there are few tonnages left,” a Spanish trader said.
Limited offers for import HRC have been voiced in northern Europe at €630-640/mt CFR Antwerp, versus €610-630/mt CFR in late July.
$1 = €0.92