HRC prices have declined further in the EU domestic market in the past week. Distributors across Europe still have sufficient stocks and so they are not in a hurry to buy and prefer waiting in view of the ongoing downtrend of prices. At the same time, competitive import offers have kept exerting pressure on domestic prices.
Accordingly, the general range in the EU HRC market is currently at €650-700/mt ex-works, compared to €710-740/mt ex-works last week. More specifically, the tradable level estimated by southern European mills, Italian mills in particular, is at €690-700/mt ex-works, down by €20-40/mt week on week, though most buyers are estimating the achievable level at €650-670/mt ex-works. In northern Europe, most customers have reported the tradable level at €650-680/mt ex-works, down by €40-50/mt over the past week.
“Transaction activities have remained extremely weak in the region, due to sufficient stocks and expectations of further price declines. To balance supply and demand and restrain the downtrend, mills need to cut their production levels,” a market insider told SteelOrbis.
Meanwhile, import offers have remained competitive, although bookings have been scant due to long delivery times. Import HRC offers to southern Europe have settled at €650-690/mt CFR, depending on the origin, compared to €650-700/mt CFR last week. In particular, suppliers from Asia, including those from Japan, South Korea and Indonesia, have been offering their materials at €650-660/mt CFR Italy. In Spain, offers for ex-Indonesia HRC have been voiced at €655/mt CFR, while “Japan is sold out and is still not offering to Spain,” according to sources.
According to market insiders, a deal for ex-Egypt HRC is reported to have been done at €650/mt CFR Spain this week, down by around €30/mt week on week, though this information has not been confirmed by the time of publication.
In the meantime, limited offers have been coming from Turkey to southern Europe, with the indicative price level standing at €690/mt CFR, including duty, compared to €700/mt CFR last week. However, this level is considered to be unworkable in the region given the more attractive offers from other foreign suppliers.
Furthermore, this week, market insiders have been discussing offers for ex-China HRC at around €625/mt CFR. However, market players believe it is not possible for Chinese suppliers to sell to Europe considering that “Chinese offers are very rare in Europe due to the antidumping duty at 18-36 percent plus the countervailing duty at 4.6-36 percent, depending on the supplier.”
In the meantime, European HRC suppliers have also been heard in the export markets this week. In particular, according to market insiders, a deal for ex-EU HRC from one of the leading European mills has been signed to Turkey at $660/mt CFR, which translates to around $610/mt FOB or €620/mt FOB. “I think if ArcelorMittal and Tata are selling to Turkey at $660/mt it means that they are ready to step down in prices, but they do not want to disrupt the domestic market,” an Italian trader told SteelOrbis.