North African HRC producers have started offering HRC for a new round of export sales, targeting a price increase compared to the latest deals. One reason is the firmness of scrap prices, while others are the rising HRC prices in the EU and the strong prices in Turkey. As for exports, however, the recently announced AD duty in the EU is going to result in challenges for Egypt, but in some opportunities for another North African HRC seller, namely, Algeria.
In Egypt, current HRC export prices are at $565-570/mt FOB, up by around $20-35/mt compared to the prices for May shipments. Particularly, in the previous round Egypt sold to Latin America and Europe at around $535/mt FOB, while in the US one lot was purchased at $550/mt FOB, as SteelOrbis reported. Moreover, according to sources, Turkey booked at least 30,000 mt from Egypt at $545-550/mt CFR and at up to $570/mt CFR in the latest deals. The current offers from Egypt to Turkey are at $585-590/mt CFR, sources report, with one sale discussed at around $580/mt CFR. “It is on the higher side and I believe it could have been workable only if someone had an urgent requirement and no space to wait for cargoes from Asia,” a Turkish source told SteelOrbis.
The market players are trying to evaluate the potential effects of the EU AD rates, announced against Egypt at 15.6 percent. “Egypt has been enjoying the EU market for a while since Turkey, its closest competitor, had an AD duty of 4.6-7.8 percent depending on the producer. Now Egypt is less competitive than Turkey,” a trader said. It is believed that Algeria is going to step up its sales to the EU, while India is foreseen to remain active since the AD duty for this origin is zero percent.
According to market sources, the current HRC export price from Algeria stands at $570-580/mt FOB depending on the market and for cargoes to be shipped in June. In the previous round, the workable prices for Algerian HRC stood at $560-565/mt FOB, SteelOrbis has heard.
In the domestic markets, Egyptian HRC is still standing at EGP 33,000/mt ex-works including 14 percent VAT, or at around $570-575/mt ex-works. In Algeria, according to sources, the local HRC price stands at DZD 105,000/mt ex-works including 19 percent VAT or around $660/mt ex-works. In both countries, the demand domestically is reported to be sufficient despite the ongoing Ramadan and the approaching holiday.
Import offers from China have been reported at $510-515/mt CFR in Egypt and $530-535/mt CFR in Algeria, both for end-of-May shipments. Russia is not yet in the market with May production HRC offers. Its latest prices to North Africa were reported at $490-495/mt CFR. The new offers are expected to be announced next week.