Domestic HRC prices in Europe have decreased once again this week, as market conditions have kept worsening due to the high inventory levels of service centers, which do not plan any restocking in the short run. Mills have been forced to cut their prices for HRC to maintain market shares and are ready to keep outputs stable “at least for now” to get free carbon emissions allowances, which are granted based on actual output levels.
More specifically, domestic HRC offers from European mills have been estimated at €560-580/mt ex-works for October delivery, against €570-600/mt ex-works last week. Domestic HRC offers in Italy have been voiced at around €570-580/mt ex-works, the same as last week, though offers from mills in the north of Europe have settled at €560-580/mt ex-works, down by €10-20/mt over the past week. According to sources, this decline was mainly cause by sluggish demand in the region as the automotive and construction sectors are weak and customers are refraining from placing new orders, and some are even canceling old ones.
Meanwhile, tradable HRC offers both in Italy and in the north have been estimated at around €550-555/mt ex-works, against €560/mt last week. According to sources, prices have been falling amid low demand and the situation may remain pessimistic as mills are unlikely to cut production this year.
“If mills reduce their offers further, they will lose too much money. On the other hand, they are not reducing output to help prices to recover, as they will lose CO2 emissions allowances for next year,” a market insider said.
In the meantime, offers for import HRC have been voiced at €530-560/mt CFR, depending on the supplier, against €530-580/mt CFR last week. Offers directly from Asian mills, including those from Vietnam, have been reported at €528-540/mt CFR southern Europe, against €540-545/mt CFR last week, though, according to a number of traders, lower prices at around €510/mt CFR have already been heard in the market this week. Offers for ex-Egypt HRC have been estimated at $600-605/mt CFR, or around €537-541/mt CFR. Besides, offers for ex-India HRC have been voiced at $600/mt CFR, or €$537/mt CFR, the same as last week. “Prices are going down and are rather competitive, but no one wants to take risks due to antidumping investigations against HRC from other countries,” a Spanish trader told SteelOrbis.
Furthermore, offers for ex-Turkey HRC have been voiced at around $610-630/mt CFR, including duty, which translates to around €545-560/mt CFR, mainly the same as last week. Offers for ex-China HRC have been voiced at €530-540/mt CFR Italy, including duty, down by €10/mt on the higher end of the range week on week.
$1 = €0.89
