Foreign hot rolled coil (HRC) suppliers have continued to cut prices for southern European buyers this week. However, trading activity in the region has remained limited, with buyers mostly signing occasional bookings for immediate consumption amid the continuous lack of demand for HRC. Besides, falling import offers have been exerting pressure on domestic prices.
Accordingly, this week most HRC suppliers have decided to decrease their offers for southern European importers, including Spain. More specifically, offers from Japan and South Korea have decreased to around €950-970/mt CFR Spain, down by €80-100/mt week on week, with several deals signed at the abovementioned level. Ex-Taiwan HRC offers have also fallen to €970-980/mt CFR from €1,050/mt CFR last week. Meanwhile importers in Spain have reported that ex-India offers have been voiced at €1,020/mt CFR, compared to €1,030-1,050/mt CFR last week, though this level is considered to be indicative and new deals are expected to be signed at €980/mt CFR and below level.
In addition, several HRC offers from China have been heard at $970/mt CFR excluding duty, which translates to around €917/mt CFR southern Europe, and “considering the average level of duty at 20 percent, the current ex-China HRC prices are too high for European buyers”, according to sources.
“In general, Spanish customers are in wait-and-see mode. When they have the security that a vessel from Asia is going to touch Spanish ports, they may consider placing a small order, but not for big volumes. So, they prefer to buy from Europe at a higher price but with a short delivery time,” a market insider told SteelOrbis.
Meanwhile, local HRC prices in Spain have been settled at around €1,200/mt ex-works, compared to €1,200-1,250/mt ex-works last week, while workable prices in Italy have been voiced at around €1,150-1,180/mt ex-works, against €1,230-1,250/mt last week.
“HRC prices have started to decrease when the supply of slabs which was disrupted during the initial weeks of the war in Ukraine has finally become balanced and HRC availability has normalized. We expect that the waiting trend will continue in southern Europe, with buyers sitting on strong inventories,” a Spain-based trader stated.