HRC prices have inched up further in the EU market in the past week. Transaction prices are now at €485-495/mt in the Italian market, while they are at €500-510/mt in northern Europe, both ex-works. In both cases, there has been an average increase of €5/mt.
The HRC market in the EU remains supported mainly by the lack of available volumes, but also by good order books and a lack of competitive offers. European producers have sold their December production and are now offering their first quarter rolling material. Meanwhile, sources have reported some delays in production and shipments due to the new lockdown measures around Europe, which is another factor that is supporting prices on the one hand, but slowing down demand on the other, especially in the automotive sector. However, European HRC prices are expected to remain strong in the coming period as the plants that were restarted in the past few months are not operating at their normal capacity utilization rates yet.
Meanwhile, import activities have remained subdued due to the EU safeguard measures and the ongoing investigation on ex-Turkey HRC. However, according to sources some lots have been sold from Turkey to Italy recently due to the lack of supply domestically, despite the strong possibility of provisional AD duties being announced on December 23. In fact, production is still at historically-low levels at ArcelorMittal Italia's Taranto plant, while Arvedi's new EAF in Cremona is still in the ramp-up phase. HRC import offers have been in the range of €460-480/mt CFR Italy recently. Meanwhile, according to sources, the European Commission is about to make imports of ex-Turkey HRC subject to registration, which strongly suggests that retroactive duties will actually be imposed if the ongoing investigation proves that dumping practices have occurred. The provisional duty may be around 10 percent depending on the mill.