Hot rolled coil (HRC) prices seem to have almost plateaued in the EU market recently, as the upward trend has been slowing down in the past few weeks due to lower activities and the looming announcement by the European Commission on the EU safeguard measures on steel imports. Meanwhile, local supply has remained tight and has kept preventing any price decreases, but the number of import offers have somewhat increased with mills from North Africa and Asia being back to the market.
According to sources, achievable prices for HRC in the spot market are around €1,130-1,160/mt ex-works in the EU market, i.e., up €5/mt on average compared to one week ago but stable compared to late last week. However, domestic offers can reach €1,170/mt ex-works and higher levels for relatively short lead times. Mills still have good book orders and deliveries are mostly for the fourth quarter. As reported previously, demand from the automotive sector has decreased recently, in part due to a lack of semiconductors globally. However, HRC prices have been supported by supply shortages and also by scrap price rises locally.
As for the import market, there has been a number of offers reported in the market. In particular, Egypt is offering €1,050/mt CFR, while Morocco is there with €1,000-1,010/mt CFR levels, both for August deliveries. At the same time, ex-Vietnam and ex-Japan offers have been recorded at €1,000/mt and €1,035/mt CFR respectively, for August and late August deliveries. Turkey has been in the market with $1,100-1,130/mt FOB base in offers, around $20/mt down over the week, estimated at around €1,015-1,025/mt CFR.
In the meantime, the information reported on the ex-India offers to the EU has been rather confusing. One of the mills traded limited lots at $1,120/mt CFR to the EU last week, as SteelOrbis reported, while the rumours regarding a 20,000 mt sale at $1,080/mt CFR to Italy have been discussed in the market. Even lower prices such as $1,030-1,050/mt CFR have been heard in the south of the EU, however, those were not confirmed by the time of publication. “India’s situation is confusing since there were deals around two weeks ago at $1,020-1,030/mt CFR for 20,000 mt to Italy for the Q3 quota and there is already certain volume waiting at the customs area to be cleared after July 1. India should be able to sell at $1,100/mt CFR to Europe these days and the lower levels might be resulting from the competition between the sellers and also depending on their positions,” a trader suggested. "The feeling is that from July 1 large import volumes will be ready to be cleared as various traders will want to sell them in order to realize," a European source suggested.
In the northern part of the EU Russia’s Severstal has sold around 20,000 mt in total at $1,235-1,255/mt FOB Baltic region, down from $1,270/mt FOB deals, seen last week. According to sources, the delivered price level is estimated at €1,075-1,090/mt CPT for Severstal’s August production of HRC.
€1 = $1.19