Hot rolled coil (HRC) prices have indicated a further slight decrease in the EU domestic market in the past week, due to high volumes of imported material, slow demand from the automotive sector, and iron ore price setbacks globally. In this context, sentiment among buyers is negative and market activities have remained limited. Compared to September 8, SteelOrbis’ reference prices for HRC in the EU market have decreased from €1,000-1,100/mt to €1,000-1,090/mt, both ex-works. More specifically, achievable prices are currently in the €1,000-1,020/mt range in the Italian market and mainly in the 1,050-1,090/mt range in northern Europe, all ex-works. Some European mills are still offering material at €1,150/mt ex-works officially, while others, especially in southern Europe, are offering at prices closer to €1,000/mt.
As reported previously, demand from the automotive sector is reduced due to the lack of semiconductor chips globally, and, according to sources, this situation may not improve before the end of the year. At the same time, buyers have now sufficient stock levels as they booked good volumes ahead of the summer holidays. Meanwhile, sources said that many market players are concerned about the big volumes that were purchased from the import market in past months and that will be cleared through customs starting from October 1. Large volumes of HRC are expected to be subject to the safeguard duty, as happened in July with ex-India material. According to sources, an Indian mill is offering HRC at €850/mt CFR Italy for deliveries by the end of December, but this will probably be subject to duty. Similar or slightly lower offers have been reported from the CIS and Turkey. Ex-Russia offers are at $910/mt FOB for southern Europe, while Turkey has sold small lots at $920-930/mt FOB recently, totaling around 40,000 mt.
On the other hand, European mills are still enjoying good order books - with lead times stretching between late October and early next year - and are not willing to decrease their prices significantly for the moment. As reported previously, mills are engaged in long-term contract negotiations and therefore intend to keep spot prices as high as possible.