Trading activities have remained scarce in the European HRC market in the past week, and prices have declined further compared to May 25. SteelOrbis has assessed the achievable base prices at €920-950/mt in Italy and €970-1,000/mt in northern Europe, both ex-works. Therefore, the general range in the EU market is currently €920-1,000/mt ex-works, against the previous levels of €980-1,130/mt ex-works. While most mills are offering their July output, some mills have not filled their June order books yet. As reported previously, some sources believe the bottom level will be €900/mt ex-works, although a few other sources even think the €850/mt level might be reached. "Sooner than later, prices will reach production costs," one source underlined. Consequently, mills may be forced to cut their outputs in the coming period. Meanwhile, the demand outlook remains bearish, considering that automobile manufacturers should continue to face capacity constraints this year, as the global semiconductor shortage is likely to persist. Overall, most sources think that supply will outpace demand even when restocking activities resume.
Meanwhile, business activity in southern Europe’s HRC import market has continued to be mostly subdued by high stocks at buyers and weak demand. New import offers have kept decreasing this week, but sources believe that HRC prices have almost reached the bottom. At the same time, in contrast to Spain where deals have remained occasional and the lowest import prices were reported at €860/mt CFR level, the tradable level for import HRC in Italy has settled at €830-840/mt CFR.
Accordingly, import offers have been reported at €830-870/mt CFR southern Europe, down by $10-20/mt over the past week, with the lower end of the range corresponding to import offers in the Italian market and with the higher end of the range in Spain. More specifically, offers from Asian suppliers, including Japan, South Korea and Taiwan have settled at around €830-850/mt CFR Italy, down by €10/mt week on week. However, ex-Asian HRC offers in Spain have been voiced at €860-870/mt CFR. Besides, a few deals for ex-Japan HRC have been reported at €870-875/mt CFR Spain, down by €15-20/mt on the higher end of range over the past week.
In addition, market insiders reported that ex-Turkey HRC was booked in Italy at around €830/mt CFR this week, compared to offers at €900/mt CFR last week. “We are hearing these low levels only in Italy, but not in Spain. As we know, ex-Turkish HRC has been offered at €880/mt CFR Spain, including duty, down €20/mt week on week,” a Spanish trader told SteelOrbis.
At the same time, most Indian mills are said to have suspended negotiations in southern Europe following the recent introduction of export duty and lack of buyers’ interest in boron-alloy material offered by Indian suppliers to avoid duties. Nevertheless, indicative offers for ex-India HRC have been reported in Italy at €800/mt CFR, down by €50/mt week on week.
