The European hot rolled coil (HRC) market has gradually begun to recover after the holiday lull, but trading activity remains virtually non-existent. At the same time, hardly any mill has followed the lead of ArcelorMittal, which had raised its HRC offers by €30/mt across Europe just before the holidays. Meanwhile, the import HRC market has been completely inactive this week, with most buyers claiming that they have not yet received any new offers. Besides, the general sentiment coming from Asia suggests a rather bleak outlook, with many indicating that the prospects for the near future are far from positive.
More specifically, while offers from mills in northern Europe have been voiced at not higher than €580/mt ex-works, mainly the same as before the Christmas and New Year holidays, the tradable price level has been estimated at €560-580/mt ex-works, with some buyers claiming it is still possible to push for levels lower than €560/mt ex-works.
Meanwhile, local HRC prices in Italy have been estimated at €560-580/mt ex-works, with trade activity considered to be even slacker than in northern Europe. “There’s zero activity for the moment as it’s early, but everyone is far less positive than before the holidays,” the representative of an Italian mill told SteelOrbis.
Import activities have remained subdued, with the indicative prices estimated at €540-560/mt CFR, down by €20/mt since late December. In particular, according to sources, ex-Turkey HRC offers have been assessed at €550-560/mt CFR, including duty, down by €10/mt on the higher end of the range over the past three weeks. Besides, although no firm offers for ex-Asia HRC have been reported so far, sources estimate prices at around €540-550/mt CFR levels, compared to €560-580/mt CFR before the holidays. “We haven’t received new offers, but the feeling coming from the Far East is full of bad perspectives,” a trader in Spain told SteelOrbis.
At the same time, the EU market has been actively discussing revisions of trade measures, including the reduction of the tariff rate quotas to reflect the declining demand for steel in the EU, the increase of the safeguard duty from the current 25 percent to possibly 32-41 percent, and the changing of allocation methods for quotas and the setting of a 15 percent cap to other product categories similar to that already applicable for HRC. “It is anticipated that many suppliers, EU importers, and industrial users will oppose these moves, and the EU Commission will need to strike a balance between EUROFER's demands and the strict legal limits of safeguard measures as outlined by EU and WTO laws,” a source said.