The EU HRC market has continued to face slow business activity affected by low end-user demand, including from the automotive and white goods sectors, coupled with still high inventories held by distributors. Thus, most European mills have kept reducing their HRC prices, though most of them have been failing to attract buyers given low demand and more attractive import offers.
Specifically, compared to late September, HRC transaction prices in the EU have decreased by around €60/mt on average, and by €20-30/mt week on week, to €720-750/mt ex-works. More specifically, achievable prices are currently in the €730-750/mt range in the Italian market, compared to €740-760/mt last week, while in northern Europe most customers estimate the tradable level at around €720/mt delivered.
“We believe a further downward correction is still possible given the current market conditions and continuous pressure from imports,” a market insider said.
At the same time, although in general business activity has remained slow in the import market, several bookings have been reported in southern Europe given the discounts provided. In particular, around 10,000 mt of ex-Egypt HRC have been sold to Spain at €680-690/mt CFR. Besides, according to market insiders, more deals for around 30,000 mt in total of ex-Egypt HRC have been reported in Italy at €680-700/mt CFR. According to sources, ex-Egypt deals are explained by their advantage over competitors, such as a free trade agreement and faster delivery compared to cheaper materials offered by Asian suppliers.
Meanwhile, offers from Asian suppliers have been reported at €670-700/mt CFR, down by €30/mt on the high end of the range week on week, though no deals have been reported so far, considering the “very long delivery time”. Offers for ex-India boron-added coils have been voiced at €680/mt CFR southern Europe, compared to €700-720/mt CFR last week. Furthermore, ex-Turkey HRC offers have been voiced at €700-710/mt CFR, including duty, compared to €700-720/mt CFR last week.