While local demand for hot rolled coil (HRC) and business activity have remained sluggish in Europe, heading also into the summer holidays, European importers have been preparing for the start of the period for the new safeguard import quota rules on July 1.
This week, local prices from European mills both in Italy and northern Europe have remained relatively unchanged compared to last week, standing at €640-650/mt ex-works for mainly August delivery, though the tradable prices in both regions have been estimated at €625-630/mt ex-works, against €630-640/mt ex-works last week.
At the same time, as SteelOrbis reported earlier, on June 25 the EU officially extended steel safeguard measures for another two years until June 2026, aiming to prevent or remedy serious injury to the EU’s steel industry. Besides, also, effective from July 1, a 15 percent cap per county in the “other countries” HRC tariff-rate quota will be implemented. “The new restriction cap of 15 percent applies to six countries, including Vietnam, Japan, Taiwan, Egypt, Australia, and Brazil, which used to ship their HRC under the residual tariff-rate quota,” a market insider said, adding, “More buyers will be looking for alternatives like Indonesia and Saudi Arabia, though prices remain an issue as currently local HRC is more competitive.” Specifically, offers for ex-Indonesia and ex-Saudi Arabia HRC have been voiced at around €640-645/mt CFR southern Europe, at least €10-15/mt higher than the workable prices for local materials.
Indicative offers for ex-Asia HRC have been estimated at around €610/mt CFR, mainly the same as last week, though no new deals have been reported so far. Offers for ex-India HRC have been heard at €620/mt CFR, while offers for ex-Turkey HRC have been at around €630-640/mt CFR, including duty, the same as last week.
Meanwhile, market participants are also discussing adding duty-sharing clauses to contracts, so buyers and sellers could share the duty costs. However, most believe such “duty sharing” is unlikely to be sufficient to ease the impact of the new safeguard measures, while the only real solution may be purchases “without risks” from alternative sources like Saudi Arabia, Indonesia, Malaysia, etc.
