The situation has remained broadly stable in the European HRC market in the past week. Although trading activities have remained limited, local mills have been trying to sustain their high offers due to high production costs. Meanwhile, the expected supply shortage due to numerous production cuts across the region has not resulted in anticipated price growth so far, given distributors’ still high stocks and slow demand from end consumers. As for the import segment, although the number of import offers has been increasing in southern Europe, buying activity has slowed down recently, with only occasional deals reported in the market.
In the domestic market in the EU, most producers are at €780-820/mt ex-works in their official offers for mainly November deliveries, but levels of €750-770/mt ex-works are considered as more realistic and achievable from both northern and southern mills. Overall, local HRC prices have been relatively stable for a few weeks now, although most sources believe these levels are much higher than the actual workable prices. However, for now there is resistance from European mills against providing big discounts given the significant increase in production costs due to rising energy prices.
As for the import market, there has been a number of offers reported in the market, though trade has remained muted, even considering that import offers are more attractive than local offers. Offers to southern Europe have been reported at €680-740/mt CFR, depending on the origin, up by €10/mt on the higher end of the range week on week. In particular, offers for ex-Japan HRC have been voiced in Italy at €680-690/mt CFR, while offers to Spain have been heard at €690-710/mt CFR. Prices from suppliers from South Korea and Taiwan have settled at around €705/mt CFR Spain, the same as last week, though several ex-Korea offers have been reported in Italy at around €680/mt CFR, down by €20/mt week on week. Meanwhile, HRC offers from Vietnam have been voiced at €680/mt CFR, down by €10-15/mt over the past week. According to market insiders, suppliers from Egypt have also come out with new offers, offering at €740/mt CFR Spain.
Furthermore, offers for ex-India boron-added coils have remained at €700-710/mt CFR southern Europe. However, according to some sources, last week one of the biggest Indian producers was offering its materials at as low as €680/mt CFR and “some volumes were sold at this level”, though this information has not been confirmed by the time of publication.
Meanwhile, ex-Turkey HRC offers have been voiced at €720/mt CFR southern Europe, including duty, down €10-20/mt week on week, which is considered as too low for official offers from Turkish mills, though, it could be still possible if the proposed coils have been produced from cheap slabs imported to Turkey from Russia.
