HRC prices have kept declining in the EU domestic market in the past week, as buyers have been unwilling to restock.
Workable prices in the EU HRC market are now at €1,120-1,200/mt ex-works, against the €1,150-1,270/mt levels reported on May 5. More specifically, prices around €1,120-1,150/mt ex-works are now more common in the Italian market, while prices of €1,150-1,200/mt can be achieved in northern Europe, both ex-works. Mills' offers are for June-July output.
Meanwhile, competitive import offers have kept adding pressure to the local HRC market, especially in southern Europe. Import offers from Asia have been heard mostly at €960-980/mt CFR southern Europe this week, down compared to last week's €970-1,000/mt CFR level. At the same time, offers from Turkey have been reported at €1,000/mt CFR and slightly higher levels, antidumping duties included. Import buying has remained limited, considering the lack of demand. According to one trader, buyers may be waiting for HRC import offers to decline further, below €950/mt CFR, before placing large orders.
Some sources believe demand will improve in the EU domestic market in the coming weeks due to restocking needs, especially in Italy where stocks are relatively lower. However, no significant improvements are expected, considering the persistent weakness of the automotive sector. Meanwhile, the problem of exhausted credit lines owing to record-high prices in the past months is still restraining buyers' ability to purchase.
Most SteelOrbis sources think domestic HRC prices will decrease further in the EU in the short term, even getting close to the €1,000/mt level. However, price declines may end earlier, according to some other sources, due to the abovementioned restocking activities and high production costs. Also, due to high costs (of energy, mostly), steelmakers may be forced to reduce their production, which would allow them to curb price declines to a certain extent.