Business activity in the European hot rolled coil (HRC) market has been weak lately, with local mills maintaining their offers given high energy costs and cuts in production, while most distributors were not interested in new purchases, struggling to move their already high stocks. Meanwhile, most import offers have remained unchanged, with only some suppliers providing discounts, though the interest in import coils has remained minimal as “demand from end-users has been below the normal level usually seen in September”.
More specifically, official HRC prices from European mills have settled at €780-820/mt ex-works, compared to €780-850/mt ex-works last week. However, the decrease of the higher end of the range is considered as “an indicative and unworkable correction as neither €850/mt nor €820/mt could be workable in the EU”. Thus, while €780-800/mt ex-works offers have been coming from producers in Italy and €800-820/mt ex-works from northern Europe, the tradable level for both regions is estimated at €750-770/mt ex-works, the same as last week.
As for import prices, offers to southern Europe have been reported at €680-730/mt CFR, depending on the origin, down by €20/mt on the lower end of the range week on week. In particular, several offers for ex-Japan HRC have been voiced in Italy at €680-700/mt CFR, compared to €700-720/mt CFR last week. However, prices from other suppliers have remained mainly unchanged, with ex-South Korea and ex-Taiwan offers coming at €700-710/mt CFR and at around €690-695/mt CFR from Vietnam. Offers for ex-India boron-added coils have been reported at €700-710/mt CFR Italy and at €710-715/mt CFR Spain, the same as last week, while HRC from Turkish traders has been offered in Italy and Spain at around €700/mt CFR, excluding duty, which translates to around €730-740/mt CFR.
“The situation is difficult here. The only hope we have is restocking for the first quarter of next year, but the reality could be even worse given no visible signs of a demand improvement,” one of the biggest producers in Italy told SteelOrbis.