The EU HRC market is still in the slow summer period, therefore, trading activities have been very quiet in the past two weeks, especially in the southern European market, where most players will resume their business only at the beginning of September. Compared to mid-August, transaction prices decreased by €50/mt on average, to €700-750/mt ex-works. More specifically, achievable prices are currently at the €700-740/mt range in the Italian market and mostly at €710-750/mt in northern Europe, all ex-works.
According to sources, business activity in southern Europe, Italy and Spain in particular, has been close to zero over the past weeks, with both mills and buyers staying largely out of the market. “Everything is still closed, and our customers are very cautious as they are having the worst August ever or similar to 2008. Therefore, they are not going to buy any material until the actual end demand would be clear, which we doubt would happen in early September,” a Spain-based trader told SteelOrbis.
At the same time, traded HRC volumes have been also still very low in northern Europe, as most distributors have been mainly focused on selling HRC from stock rather than buying new tonnages due to high inventories. There were talks about a transaction for ex-Italian HRC in Germany at €750/mt DDP at the beginning of the week. However, by the end of the week, market insiders reported that HRC transaction prices have dropped to around €710-720/mt ex-works in northern Europe.
As for the import market, the trade activity in southern Europe remained in lull over the past month due to summer vacations in the region. Though, this week new import offers have started to appear in the market, reflecting a slight downward correction as compared to early August prices. Thus, import HRC offers have been reported at €670-690/mt CFR, compared to €680-715/mt CFR at the beginning of the month.
In particular, offers from India have been reported at €680/mt CFR southern Europe, down by €5-20/mt month on month. Besides, offers from one of the biggest Japanese HRC suppliers have been voiced at €670-680/mt CFR, compared to €690-700/mt CFR in the first week of August. Furthermore, offers from Turkey have been reported at €650/mt CFR Italy, excluded duty, which translates to around €690/mt CFR, duty paid.
“Considering still weak consumption and persistent overstocking we doubt that buying activity in the spot market recovers fast, at least not earlier than second half of September,” a market insider said.
