HRC suppliers in the Mediterranean region, particularly in North Africa, have started to feel the pressure on their offers amid sliding Turkish indications, weaker scrap sentiment and the generally silent European market amid quota distribution uncertainty. As a result, Egypt and Algeria are in the market to sell for export with the latter having allocation even for June production, but buyers are mainly in wait-and-see mode. Local HRC offers in both countries have been maintained over the past week due to moderate demand and the lack of import activity. In particular, mainly China and Turkey are offering these days to North Africa, with Russia being absent while redirecting most of its allocation to Iran and CIS countries still.
HRC export offers from Algeria traditionally vary from market to market with some downward adjustments seen for European destinations. The offer level for EU countries is at $690-700/mt FOB, down from the minimum of $710-715/mt FOB at the end of last week. For African buyers, the offer level is at $650/mt FOB, while $640-645/mt FOB might be reachable, customers assume. For the United States, the ex-Algeria HRC offer is still at $670/mt FOB, the same as a week ago, SteelOrbis has learned.
Algerian HRC domestic prices have remained at DZD 108,000/mt ($680/mt) ex-works, while the demand, according to sources, has been a bit slow lately. One reason is modest project activity due to some budget adjustments, another reason is the sufficient level of stocks in the market, following the arrival of some import cargoes from China from previous bookings.
The Egyptian HRC supplier prefers to maintain low export activity, offering only to certain customers with prices varying from customer to customer depending on the region. At the end of last week, an ex-Egypt HRC offer was reported to Tunisia at $640/mt FOB, while in Turkey, according to sources, a medium lot was sold at around $645-650/mt CFR base, which should be around $620-625/mt FOB.
The domestic HRC prices in Egypt are still stable at EGP 39,000/mt ($658/mt) ex-works while the demand is reported to be on the slow side, with stocks being at medium levels.
In the import segment, offers of HRC from China have been reported at $590-600/mt CFR in Egypt, while in Tunisia, according to sources, medium lots have been booked at around $590/mt CFR base. In Algeria, the latest offers have been reported at $580-600/mt CFR base and $615-620/mt CFR effective. However, no import activity has been seen in the Algerian market since buyers are in the process of obtaining their import licenses for the second half of the year. Ex-Turkey offers to North Africa, according to market players, are standing at $650-660/mt CFR Egypt and Tunisia for small and medium lots, and at $630-645/mt CFR Egypt for large volumes.
Offers in the local currencies include 19 percent VAT in Algeria, 14 percent VAT in Egypt.
$1 = DZD 133.51
$1 = EGP 52
