Subdued sentiment has continued to characterize the EU hot rolled coil market in the past week due to slow activities, lack of demand from the automotive market, increasing pressure from import offers, and the approaching holidays. According to sources, transaction prices are currently at €840-880/mt and €890-940/mt respectively in the Italian market and in northern Europe, both ex-works. This means the general range of prices in the EU market has declined by €15/mt on average in the past week, from the previous levels of €850-960/mt ex-works. The persisting downtrend and the imminent regional festivities have made most buyers cautious recently. As reported previously, there is a lack of clarity regarding when consumption from the automotive industry will improve, with most sources excluding a recovery in the first quarter of 2022. On the bright side, the US-EU tariff-rate quota system that will commence on January 1 is expected to enhance European producers' export opportunities, reducing supply pressure domestically to a certain extent.
Meanwhile, import offers have started to have a negative impact on the outlook for domestic spot prices. This is because the material being offered currently will probably go through customs clearance in the second quarter next year, i.e., when new quotas are available. However, for now most sources are waiting to see what will happen on January 1, 2022, when the big volumes currently sitting at ports are unloaded. SteelOrbis has learned of current offers from Asia around €800-830/mt CFR Italy for deliveries in February-March. More specifically, ex-India offers are at €830/mt CFR. According to sources, a small lot was sold from Turkey at around €810/mt CFR recently. As for northern Europe, a Baltic-based Russian mill sold its last volumes for January production at $890-940 FOB depending on the coil weight, down from the $910-950/t FOB levels seen in previous sales.