The European HRC market is still trying to digest the impact of the EU’s announcement of the country-specific quotas (CSQs) and its immediate and potential effects on business. While the situation regarding the third quarter quotas will be clear after July 14, some European buyers, seeing opportunities, have decided to restock partially for the ongoing quota period, but also for the next one, choosing relatively safe origins. In the meantime, locally, according to sources, ArcelorMittal has unofficially increased its prices by around €50/mt for the main flat products, as expected. However, although the workable price levels in the EU have increased since last week, the newly announced levels remain indicative for now due to scarce trade and the approaching holidays.
According to sources, ArcelorMittal Europe has set its HRC price idea at €770/mt ex-works, up from the previous €720/mt ex-works. The market reality, however, is at €700-720/mt and up to €730/mt ex-works in some cases as demand is not supportive. Some buyers in Italy are still aiming at €685-690/mt ex-works, but mills are becoming more and more reluctant to sell at these levels. However, not many sales are heard at €700-705/mt ex-works. “These days, [higher price] announcements are just to fix the level higher for September,” a trader told SteelOrbis. Some sources expect HRC prices to reach €800-820/mt ex-works after the holiday season.
In the import segment, some sizeable import bookings have been reported in Europe from last week. According to sources, India sold two cargoes of HRC at around $650-660/mt CFR, mainly to Spain and Antwerp for July shipments and has further increased offers for re-rolling grades to $670-675/mt CFR. In addition, Turkey has traded at least 30,000 mt of HRC at around $580-585/mt FOB, which translates to around €575-580/mt CFR, SteelOrbis estimates. In addition, much talk has been heard about ex-Vietnam sales to Italy, with initial information stating that one of the large buyers purchased 70,000 mt at $735/mt CFR for the fourth quarter quota period. While the price is considered quite high, many sources believe it could be reachable with the expectations of the market in Europe being well over €800/mt ex-works. “Large buyers are trying to replace orders from risk countries. But Vietnam and Turkey are overflowing now as well. Meanwhile, EU mills are becoming very selective and restrictive in what they are offering,” a European trader commented. In addition, the supplier does not have an AD in the EU and its CBAM rate is considered to be acceptable. In addition, Egypt has been offering at $700/mt CFR, with no deals reported.
In addition, some offers have been reported on DDP basis. In particular, South Korean picked and oiled coils have been offered at €750/mt DDP. The price has been assessed as being on the higher side and market participants say that importers' current preference is to purchase on CFR basis rather than DDP basis.
In the CRC and HDG segment, AM has announced a price of €880/mt ex-works, while reasonable levels are estimated by market players at around €820-850/mt ex-works, but the market really must see some activity first. Sources report that the situation specifically in the coated steel segment is quite tough, stating that many re-rollers were importing HRC specifically from Malaysia and Indonesia, but these origins are no longer workable and they rely on imports as it is impossible to buy this material at a low price from EU mills,” a source told SteelOrbis. “Some were using full hard which falls under the CRC quota and no mill will export FH instead of CRC with the new volumes,” he added.
