Local HRC prices in EU keep dropping, import prices follow suit

Despite the anticipation for local HRC prices to hit bottom since early June, domestic HRC prices are still trending down in the EU market. The main reasons are the still very scarce transaction activities due to weak demand both from end-users, including the automotive sector, and distributors who still have high stocks, coupled with logistics problems at ports. Meanwhile, new import HRC offers from all main suppliers have kept decreasing. However, despite the competitive prices, the interest in import coils has remained minimal.

SteelOrbis has assessed achievable base prices as standing in the wide ranges of €780-800/mt in southern Europe, including Italy and Spain, and €860-880/mt in northern Europe, both ex-works. Accordingly, the general range in the EU market is currently at €780-880/mt ex-works, compared to €820-900/mt ex-works reported on June 23. But prices in Italy are approaching the €750/mt level according to sources, while in northern Europe €850-860/mt ex-works may be the maximum workable level currently. “We expect some limited restocking activity maybe at the end of July or so, and this will help HRC prices at least to stabilize,” a market insider told SteelOrbis.

As for import prices, offers to southern Europe have dropped to around €720-760/mt CFR, compared to €760-820/mt CFR last week, with the lower end corresponding to the most aggressive ex-Turkey and ex-India HRC offers. In particular, offers from Turkey have been reported at around $750-760/mt CFR or €720-730/mt CFR southern Europe, including duty, down by €60-80/mt over the past week. However, despite competitive prices, market insiders have not been in a hurry to sign new deals due to long lead times compared to the domestic mills and due to risks related to safeguard measures and problems at EU ports.

Furthermore, suppliers from India have decreased their offers for boron-added coils to €720-740/mt CFR southern Europe, down by €30-40/mt week on week. According to market insiders, a contract for around 30,000 mt of ex-India material was discussed at $785/mt CFR (around €750/mt CFR) at the beginning of this week. Besides, market insiders have been discussing more deals for around 50,000 mt in total signed at around the €720/mt CFR level, though this information was not confirmed by the time of publication. “There are aggressive offers from India at €720/mt CFR levels, the same as from Turkey, but some are even lower at €715/mt CFR. And effectively, there is too much talk about Indian deals, which are highly possible, but nobody can give a firm confirmation,” a market insider stated.

Meanwhile, Asian suppliers, like those from Japan, Taiwan and South Korea have been offering their materials at €740-760/mt CFR, down by €40-50/mt week on week, with the lower end of the range corresponding to Italy and the higher end of the range to Spain.

Import HRC offers, CFR southern Europe