Hot rolled coil (HRC) prices have declined further in the EU market in the past week, with the range of domestically-achievable prices shrinking from €1,120-1,200/mt to €1,000-1,130/mt, both ex-works. Transaction activities have remained extremely weak in the region, due to sufficient stocks and expectations of further price declines, sources reported. Mills are expected to cut their production levels in the coming period in order to restrain the downtrend. This may lead to longer-than-usual stoppages during the summer period, one source underlined.
Prices around €1,000-1,050/mt ex-works are now more common in the Italian market, while prices of €1,100-1,130/mt are seen in northern Europe, both ex-works, although some sources believe €1,100/mt may be the maximum level currently. Mills are mostly offering their July output.
In the coming period, local prices are expected to decline further, getting close to €900/mt, according to sources. However, such a level may be the bottom, considering high costs.
No significant improvements of demand are expected considering the persistent weakness of the automotive sector. As per the latest data from the European Automobile Manufacturers' Association, new passenger car registrations in the EU fell by 20.6 percent year on year to 684,506 units in April, as supply chain issues have kept weighing on car production. Apart from the automotive sector, other end-user sectors are said to be underperforming.
Meanwhile, import offers have remained competitive, although bookings have been scant due to long delivery times. Import offers from Asia have been heard mostly at €890-930/mt CFR southern Europe this week, down compared to last week's €960-980/mt CFR levels. Offers from Turkey, according to sources, have been standing at €920-930/mt CFR this week. Market players report that the workable prices for import HRC in Turkey are below €900/mt CFR, and some of them state that there have been even much lower indications from some suppliers.