Hot rolled coil (HRC) prices declined in the EU domestic market in the past week, on the back of slack demand and competitive import offers. According to sources, the range of transaction prices declined by €20/mt on average, to €1,040-1,170/mt ex-works. Achievable prices are mostly between €1,040-1,080/mt in the Italian market and mostly in the €1,120-1,170/mt range in northern Europe, all ex-works. Despite the price declines, supply has remained generally tight, and most mills continue to offer their fourth-quarter production or are sold out until the end of this year. Meanwhile, sources said that although the flooding disasters in Germany haven't had any impact on productions so far, they have caused disruptions in the logistics, and this may help support prices despite the summer slowdown or even help pushing them up in September.
As reported previously, prices have been under some downward pressure in the past few weeks due to competitive import offers, especially in Southern Europe. According to sources, HRC offers from various sources, mostly Asian countries, are generally between €930/mt and €1,000/mt CFR Italy, while they were around €960-1,120/mt CFR last week. According to sources, this is partially due to a recent slump of demand in countries like Vietnam, which pushed local suppliers to sell their material abroad. Vietnamese offers might get even more aggressive in the coming weeks as suppliers will need to sell large volumes. SteelOrbis has also learned that Russia's Severstal last week was selling HRC at $980-1,040/mt FOB Baltic to Southern Europe, and at $1,200-1,240/mt FOB to Northern Europe.
Despite the influence of cheaper imports, most sources believe domestic prices will not decrease significantly at least until the end of this year given low supply, safeguard measures, and the removal of tax rebates on Chinese steel exports.