HRC trading activity in the European Union has been very slow this week as market players have mostly been postponing trade ahead of the upcoming and much-awaited quota announcement. According to sources, mills supplying to the EU have received the draft of the decision on country-specific quotas, and the official disclosure is expected to be heard in the market shortly. European mills seem to be almost sold out for July and are trying to fill order books for August. However, they are still reluctant to accept low bids from buyers. The main reason is that the domestic market is generally expected to get a spark of positivity with the new quota announcement and mills are generally aiming for higher prices. Import negotiations this week have been almost silent, with market players saying there is no point at all in negotiations with the quota disclosure being just around the corner.
Mills official offers for HRC are mainly standing at €700-720/mt ex-works depending on the country, with the higher end mainly seen in Spain and in the northern region of Europe. The workable levels, however, remain at €680-690/mt and up to €700/mt ex-works, with little business seen. “Prices are not moving even with Tata being off and imports stopped. Demand is dead. The summer is here already,” a local trader told SteelOrbis.
Overall, some expect prices to increase in July after the quota announcement, with the targeted levels discussed by players at €720-750/mt ex-works depending on the mill. Some sources, however, believe that the local price increase will be minor in July and active market movements will be seen not earlier than fall. “It will increase by really small margins in July. We expect the price to increase more in September and October once customers use their stocks. Demand is slow, but also stock levels are still really high. We are expecting that customers will have to go to the market in September after the summer break,” a source said.
With the market still waiting for the quota system to be clarified, imports have as expected become even more silent than in the previous couple of weeks. Some Indian HRC offers have been reported at $650-665/mt CFR, while Vietnamese HRC has been available at around €565/mt CFR, sources reported. Ex-Turkey HRC offers have been reported this week at €570-595/mt CFR. As regards DDP-based prices, hardly any negotiations have been heard, with only some indications heard in the market. Ex-Japan HRC has been available at €710/mt DDP, while ex-Turkey HRC has been at €680/mt DDP.
