HRC prices have been trending up in the EU market throughout July, but the trend has slowed down more recently due to the approach of the summer holidays in the region. HRC transaction prices have trended sideways in the Italian market, at €390-400/mt ex-works, while they have inched up by €2.5/mt on average in northern Europe, reaching €405-410/mt ex-works. Official offers still reach up to €420/mt and around €440/mt in southern Europe and northern Europe respectively, but these are considered not feasible by customers for the moment. The main reason why local producers are being firm in their offers is the lack of competitive import offers, especially after the strengthening of EU safeguard measures starting from July 1 this year. This, added to the ongoing antidumping and countervailing duty probes against Turkish HRC, has made European buyers more cautious towards imports. Also, longer lead times for imported HRC and the bullish trend of Turkish HRC offers have contributed to buyers focusing on domestic purchases.
European producers could also count on a gradual improvement of domestic demand after the easing of lockdown measures in most countries, although demand has not reached pre-Covid-19 levels, and consumption has remained subdued, especially due to the crisis in the automotive industry. As stated, the price recovery slowed down in late July due to seasonal factors, but most sources believe that local mills will try to achieve higher prices after the summer hiatus, i.e., in September, also aided by the fact that buyers will need to restock. One source in particular said that local buyers are nervous as they have not purchased significantly in the past few months, relying on very lean stocks, and now they fear that prices will keep going up after the summer period. Low stocks seem to be the main reason for further price increases, as end-user consumption is expected to remain at lower levels during the remainder of the year compared to the pre-lockdown period. Meanwhile, producers are expected to keep their offers firm amid low margins and limited availability of imports offers.